Congress could create billions of dollars in new revenue if it were to cut Biden-era electric vehicle (EV) tax-credits, a forthcoming report from the Institute for Energy Research (IER) shows. The draft of the new report, first obtained by the Daily Caller News Foundation, highlights how eliminating the clean vehicle tax credit program started under former President Joe Biden would create new opportunities to generate more revenue under the Trump administration. As Congress continues discussions about the major budget reconciliation package, IER reports that repealing these credits could increase federal revenue between $250 and $300 billion from 2026–2035. While other reports like Cato’s March analysis have found the cost of nixing the entire Inflation Reduction Act (IRA), this IER report singles out the savings from eliminating EV tax credits under the aforementioned bill specifically. The estimate is $306 billion if the 2027–2032 fuel emissions standards aren’t adopted, or $255–288 billion if they are. “This is a glaring example of policies that hurt American families by increasing the cost of new vehicles and creating inflation that is stealing money out of their pockets,” Tom Pyle, president of IER told the DCNF. “The government needs to get out of the business of picking winners and losers, both in industry and in the marketplace.” EY-IER Clean Vehicle Credit 04 23 2025 by audreystreb The IER report lays out revenue estimates for repealing clean vehicle tax credits provided under Sections 30D, 25E, and 45W of the Internal Revenue Code, as established by President Biden’s IRA. “The Inflation Reduction Act has ballooned into one of the biggest government boondoggles in history,” Pyle said in the IER statement on the report. “Originally estimated to cost taxpayers $370 billion in energy-related subsidies, new projections paint a much more alarming picture. … A significant amount of this explosion in spending comes from runaway tax credits for electric vehicles, $300 billion alone, which overwhelmingly benefits higher-income households at the expense of working-class Americans.” House GOP leaders support a single comprehensive bill that packages all of Trump’s tax and spending priorities into what the president coined “one big, beautiful bill.” If not balanced by spending cuts or new tax revenue, these tax proposals could increase the federal deficit by $5 to $11 trillion over the next decade, according to the nonpartisan Committee for a Responsible Federal Budget. “Not a single Republican supported the IRA. This new analysis is a wake-up call — and a roadmap,” Pyle said. “It’s time for Congressional Republicans to use reconciliation to repeal the IRA and deliver on their promise to prevent future tax increases, reduce inflationary pressures, and put economic power back in the hands of American families.” “Reinstating the pre-IRA tax credit structure will recover roughly $300 billion in federal revenue between 2026 and 2035,” Pyle continued in the statement. “That’s real money that could be returned to taxpayers, fueling private-sector innovation, job creation, and consumer-driven growth instead of funneling taxpayer dollars into a narrow, government-directed vision of the economy.” In 2024, the Congressional Budget Office found that Biden-era energy-related tax credits are more costly than initially understood when the idea was first introduced. The CBO expected to see a “substantially higher” amount of money claimed in the form of clean vehicle and green tax credits, which in turn alter budget projections due to changes in expected tax revenues and increased outlays related to the credits, as stated in its report. “Together, those technical revisions increased CBO’s estimate of the budget deficit in 2024 by $25 billion and its projections of the cumulative deficit from 2024 to 2033 by $428 billion. More than half of the increase in the 10-year deficit — $224 billion — is from revised projections of amounts claimed for clean vehicle tax credits and of revenues from excise taxes on gasoline,” the CBO report states. “Of that increase, $151 billion is attributable to reductions in projected revenues, and $73 billion to increases in projected outlays.” Under Biden’s watch, the IRA gave large payouts to left-wing organizations and routed millions of taxpayer dollars to subsidize solar panel projects in some of America’s least-sunny places. IRA-backed industries like offshore wind struggled despite taxpayer cash injections and the bill’s price tag skyrocketed from 2022 to 2024, though the White House had originally claimed that the IRA would “reduce the deficit.” “Going into the negotiations in Congress about the coming budget reconciliation measure, the IRA represents trillions that could be taken away from corporate cronies and instead used to cement broad-based, pro-growth tax cuts,” director of energy and environmental policy studies at the Cato Institute, Travis Fisher, told the DCNF. Trump declared a “National Energy Emergency” on day one of his second term and announced his “unleashing American energy” plan early March, which called for an end to the Green New Deal and to unlock America’s full energy potential and bring down costs for American families. The White House, the Committee for a Responsible Budget and the Congressional Budget Office did not respond to the DCNF’s request for comment. All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
