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A Letter from LCF Executive Director on H.R.1

Posted by admin on Jul. 17, 2025 / Clean Fuels Funding / Subscribe 0

Valued Stakeholders,

On Friday, July 4th, President Trump signed H.R.1, dubbed the “One Big Beautiful Bill Act”, into law. This legislation significantly rolls back many key clean fuel tax credits. A summary is provided below, reprinted in part with permission from Alicia Cox with Yellowstone Tetons Clean Cities.

Clean fuel tax credits that were terminated early*:

Used Clean Vehicles (25E): Up to $4,000 for qualified buyers and vehicles. This credit will be terminated after September 30, 2025.
New Clean Vehicles(30D): Up to $7,500 for qualified buyers and vehicles. This credit will be terminated after September 30, 2025.
Qualified Commercial Clean Vehicle Credit (45W): $7,500-$40,000 dependent on eligibility requirements. This credit will be terminated after September 30, 2025.
Alternative Fuel Vehicle Refueling Property Credit (30C): Up to $100,000 for qualified AFV fueling property and up to $1,000 for consumers installing at home charging infrastructure. This credit will be terminated after June 30th, 2026.
*All tax credits were previously funded through December 31, 2032.
Clean Hydrogen Production Credit (45V): This credit will be terminated January 1, 2028 (was originally effective until January 1, 2033.

There are numerous other provisions that have been eliminated which also greatly impact the clean fuel industry including manufacturing, nuclear, clean electricity production and more.

Clean fuel tax credits extension:
A surprising bright spot, the Clean Fuels Production Credit (45Z) was extended from December 31, 2027 to December 31st 2029.

Clean Fuel Tax Credit Terminations and Extensions in Context
Overall, it is clear these tax credit terminations are not good for the electric vehicle industry. Generally, it is essential for tax credits to be consistent and long standing to allow for businesses to have certainty in the product they are developing, manufacturing, producing and ultimately selling. The termination of these credits may increase the cost of electric vehicles, limit availability and increase the cost of electricity and fuels, thus reducing our opportunity to deploy emission reducing and fuel cost saving vehicles.

With the new and used clean vehicle tax credit being eliminated by the end of September, only a few months away, this provides urgency to some, but not all. The New Clean Vehicle Tax Credit can only be applied to certain vehicles. If you are in the market for any of the 29 make and trim levels listed on fueleconomy.gov and wish to take advantage of the existing tax credits before they are gone, you should act now to secure your purchase before September 30th. If you are interested in one of the over 100 electric vehicle models currently available that is not on the fuel economy list, the removal of the tax credit does not greatly impact your purchase.

Additionally, if you are interested in a used electric vehicle that is under $25,000, you should purchase this vehicle immediately. However, if you are interested in a used EV that is over $25,000, the termination of the tax credit does not impact your purchase, either. There are many great deals on used electric vehicles that are over the $25,000 used clean fuel tax credit limit but still significantly well below the MSRP and even well below the MSRP including the new vehicle tax credit factored in. There are many leased electric vehicles that will be coming off their lease soon, these vehicles will be excellent options for your next EV purchase, regardless of any tax credit availability. Additionally, dealerships have been providing excellent deals on the lease of electric vehicles due to the Commercial Clean Vehicle Credit. There will likely be excellent lease deals into the future as dealerships scoop up stock in the coming months due to the Clean Commercial Vehicle Tax Credit expiration.

NOW may be the best time to purchase an electric vehicle, but there will remain great opportunities into the near future as well.

It is a bright spot that the Alternative Fuel Vehicle Refueling Property Credit is not eliminated as quickly as the vehicle tax credit. Individuals and businesses have until June 2026 for their projects. These will allow some entities to pair this tax credit with either NEVI, DOT CFI or VW Funding.

At Louisiana Clean Fuels and across the Clean Cities and Communities network, our commitment to supporting fleet sustainability and emissions reduction remains steadfast. While policy changes may shift the landscape, the long-term trajectory toward clean, domestically produced fuels and vehicles continues to advance. It's important to remember that automotive manufacturers and fleet operators plan well beyond election cycles, with strategies driven by global market forces, innovation, and consumer demand. We remain here to support you with up-to-date information, funding guidance, and technical expertise as you navigate these changes and continue your clean transportation journey.

Regards,

Ann Vail, LCF Executive Director