S.541 - Eliminate Lavish Incentives To Electric Vehicles Act; ELITE Vehicles Act (119th Congress)
Summary
S.541, the "Eliminate Lavish Incentives To Electric Vehicles Act" or "ELITE Vehicles Act," proposes to repeal several sections of the Internal Revenue Code of 1986 that provide tax credits for new, previously-owned, and commercial clean vehicles. It also seeks to exclude electric vehicle recharging property from the alternative fuel vehicle refueling property credit. The bill targets sections 30D, 25E, 45W, and 30C of the Internal Revenue Code.
The bill aims to eliminate what it deems as lavish incentives for electric vehicles. The changes would apply to vehicles purchased, or for which a binding contract was entered into, 30 days after the enactment of the Act.
The bill was introduced in the Senate on February 12, 2025, and referred to the Committee on Finance.
Expected Effects
If enacted, the ELITE Vehicles Act would eliminate federal tax credits for individuals and businesses purchasing new, used, and commercial clean vehicles. This would likely increase the upfront cost of these vehicles for consumers and businesses. It would also remove incentives for investing in electric vehicle recharging infrastructure.
The repeal of these credits could slow the adoption of electric vehicles. It may also impact the growth of the electric vehicle industry and related sectors.
Furthermore, the bill includes conforming amendments to other sections of the Internal Revenue Code to reflect the removal of these credits.
Potential Benefits
- Potential reduction in government spending and national debt due to the elimination of tax credits.
- Could lead to a more market-driven approach to the adoption of electric vehicles, rather than relying on government subsidies.
- May encourage manufacturers to focus on reducing the cost of electric vehicles to make them more competitive without subsidies.
- Could free up government resources for other priorities.
- May reduce the tax burden on individuals and businesses who do not purchase electric vehicles.
Most Benefited Areas:
Potential Disadvantages
- Increased cost of electric vehicles for consumers and businesses, potentially slowing adoption.
- Reduced incentives for investment in electric vehicle charging infrastructure.
- Potential negative impact on the growth of the electric vehicle industry and related jobs.
- May hinder efforts to reduce carbon emissions from the transportation sector.
- Could disproportionately affect lower-income individuals who rely on these credits to afford electric vehicles.
Constitutional Alignment
The bill primarily deals with taxation and spending, which falls under the purview of Congress as outlined in Article I, Section 8 of the Constitution. This section grants Congress the power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States.
The Constitution does not explicitly address environmental issues or specific industries like electric vehicles. Therefore, the constitutionality of the bill hinges on whether it is a valid exercise of Congress's power to tax and spend.
There are no apparent violations of individual rights or liberties as defined in the Bill of Rights. The bill does not discriminate against any group or infringe upon any fundamental freedoms.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).