Electric Vehicle Tax Credits Losing Their Luster For Democrats

Democrats hoping to regain power in Washington next year are seeking to revive a clean energy agenda rolled over by Republicans and President Donald Trump. But first they’ll need to decide whether that includes once-vaunted — but now fully politicized — electric vehicle buyer incentives.

Once a pillar of the Democratic clean energy agenda, the EV tax credits may now be a political liability. And the party is divided over whether they should revive the EV tax credits that the Trump administration has lambasted over the past few years — and that the American public has lost some of its enthusiasm for, according to polling.

“We’ve made unbelievable progress just from the momentum that we’d already created from 2020 to 2024,” said Sen. John Hickenlooper (D-Colo.), who sits on the Energy and Natural Resources Committee, of the credits. “We’ve got to assess how much momentum and how much benefit we got from it.”

Party insiders say the credits have gained a reputation for benefiting Americans who were already able to buy an EV without the incentive.

“It’s become polarized,” said one Democratic adviser working on energy issues, granted anonymity to speak candidly on party discussions, on the EV credits. “It’s become kind of synonymous with elite, liberal, coastal, kind of out-of-touch policy and politics. …There’s been a little more hesitance to speak directly about the tax credits.”

Democrats expanded a $7,500 consumer tax credit for new EVs in their sweeping domestic policy law, the Inflation Reduction Act, but Republicans ended the credit last year — and Democratic Party leaders have so far been noncommittal on whether they’ll move to renew it.

But House Democrats have been adamant in their belief that their party should seek to bring the credits back not just as a means to make EVs more affordable for consumers but to also protect against China’s potential dominance in the industry.

“Repealing it was the wrong decision,” Rep. Mike Levin (D-Calif.) told POLITICO. “The whole thing is a giant self-own by this administration, and it does no good for the American auto industry.”

Losing popularity

Republicans regained control of the White House and Congress in 2024 campaigning with a promise to reverse many Biden-era clean energy policies, from wind and solar incentives to the expanded EV tax credits.

Democrats responded by loudly and publicly fighting the elimination of those policies and the Trump administration’s slowing of wind and solar projects. But Trump’s consistent chastisement of the Biden administration’s push to increase the mix of EVs in the U.S. market hasn’t drawn the same level of resistance from Democrats.

EVs themselves have become less popular with Democrats since the Inflation Reduction Act was passed: a Pew Research Center survey found Democrats are 11 percentage points less likely to say they’re interested in electric cars than in 2022. The share of Democrats who said the government should encourage the use of EVs in any way also declined by 10 percentage points over that time, according to Pew.

Republicans have sought to make the credits more unpopular by claiming they’re an attack on gas-powered cars and American manufacturing.

Michigan Republican Senate nominee Mike Rogers has targeted his Democratic opponent Abdul El-Sayed for his past criticism of gas-power cars, claiming the progressive’s policies will hurt Detroit’s once-blossoming auto industry.

Trump himself has lambasted the tax credits, calling them part of the “Green New Scam.”

Competing visions

Rank-and-file Democrats have backed restoring the EV incentives, but their leadership has not explicitly said that’s part of their plans for 2027 if they regain control of Congress.

More than 160 House Democrats are backing legislation from Levin and Rep. Sean Casten (D-Ill.) that would bring back the EV buyer incentives as well as other clean energy tax credits axed last year. House Minority Leader Hakeem Jeffries (D-N.Y.) is not a co-sponsor on the bill.

Further, earlier this year, Senate Minority Leader Chuck Schumer (D-N.Y.) laid out Democratic efforts to restore the clean energy tax credits championed by the Biden administration, such as those for wind and solar.

In those remarks to the League of Conservation Voters, Schumer emphasized the need for Democrats to bring back the credits and support geothermal, nuclear and fusion energy. But he didn’t explicitly reference EVs, despite championing the EV credits during the Inflation Reduction Act push in 2022.

Neither Schumer’s nor Jeffries’ offices responded to repeated inquiries from POLITICO on their respective positions on the EV tax credits.

Any Democratic efforts to get EV buyer incentives into law in the next Congress would face a significant executive-sized hurdle given that Trump remains president through early 2029.

Some Democrats are plotting what their party’s energy agenda should look like in the case that the party holds the White House and both chambers of Congress in an immediate post-Trump political environment.

Sen. Ron Wyden of Oregon, the top Democrat on Senate Finance, told POLITICO last week that under a Democratic trifecta in 2029, “reinstating the wind and solar tax credits and bolstering the Direct Pay Program” would be a priority, though he did not mention the EV credits.

Not all Senate Democrats are 100% sold on bringing the EV incentives back. Sen. Elissa Slotkin (D-Mich.) said she’s “open to tax credits” but thinks that Democrats need “a comprehensive strategy” on energy.

“I want all of the energy,” she said. “I don’t want just one. I don’t want to pick and choose. So I just think it needs a strategy, not just kind of a one-off here and there based on your administration.”

Democrats’ energy efforts moving forward — including beyond the next Congress — would be better spent elsewhere, said Tré Easton, vice president for public affairs at Searchlight Institute, a Democratic think tank.

“There are still elements within the Democratic coalition who are still fighting the last battle of the [Inflation Reduction Act],” Easton said. By 2029, “the terrain will have shifted, the technologies will have shifted, the markets will have shifted, and Democrats need to shift as well.”

A separate proposal from the Democratic centrist group Third Way pitched a $7,500 point-of-sale rebate for EVs targeted toward “working and middle-class families,” criticizing the prior incentive for allowing “wealthier households to use the credit to buy luxury vehicles.”

Josh Freed, the group's senior vice president for climate and energy, said that a pure restoration of the credits as they existed in the post-Inflation Reduction Act environment wouldn’t be the right direction for Democrats to go, especially as voters are focused primarily on everyday challenges like rising utility bills and higher fuel costs.

“We need to incorporate lessons learned and the reality of the 2026 and 2027 economies into the proposals we’re offering,” Freed said.