Georgia lawmakers pulled the plug on a tax credit for electric cars and other low-emission vehicles a decade ago, and now, congressional Republicans are preparing to do the same.
Federal subsidies that bolstered Georgia’s electric vehicle manufacturing industry would end under President Donald Trump’s “big, beautiful” taxation and budget bill passed by House Republicans in May.
And if the Senate passes the bill and Trump signs it into law, the measure might slow the sales of EVs while simultaneously making owning a battery-powered vehicle more costly.
But as Congress weighs cuts to EV tax breaks, some state legislators in the Republican-controlled General Assembly don’t seem eager to make up for the proposed federal rollbacks.
“Consumers should buy the vehicle of their choice, and the government should not be subsidizing the purchase of that vehicle,” said state Sen. Steve Gooch, R-Dahlonega.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
State Sen. Frank Ginn, vice chairman of the Senate Economic Development and Tourism Committee, said what the Legislature plans to do will depend on the state’s needs at the time. But he said he doesn’t believe ending federal incentives will slow production in EV manufacturing plants in the state.
Industry observers disagree, saying removal of incentives passed during the Biden administration could hurt manufacturing projects across the state.
Ginn, a Danielsville Republican, said tax credits make sense to jump-start a new industry, but once it’s up, he said companies need to navigate the market on their own.
But supporters of EV subsidies fear that if the state doesn’t take up new incentive programs, it could cost Georgia jobs and the state might fall behind other states as an EV manufacturing hub.
“It appears as if the government, state or federal, would be stepping away when it is really important for us to be pushing us forward rather than stepping back,” said Emanuel Jones, a car dealer and Democratic state senator from Decatur.
The reconciliation bill targets provisions from the Inflation Reduction Act, signed into law by then-President Joe Biden in 2022.
Those proposed rollbacks include sunsetting a $7,500 tax break for new electric vehicles largely manufactured in the U.S. by the end of 2026, phasing out production subsidies for manufacturers of batteries and other clean energy inputs and ending a tax credit for EV charging stations.
Additionally, the measure would impose an annual $250 fee to compensate for taxes not paid by EV owners at the gas pump.
The reconciliation bill mirrors legislation passed by the General Assembly a decade ago.
In 2015, state legislators revoked a $5,000 tax credit for no-emission vehicles. That same year, they imposed an over $200 annual registration fee for EV owners. And in 2023, Republican state lawmakers. implemented a tax on public EV charging stations — that tax is expected to go into effect in 2027.
Georgia’s rise as an EV manufacturing hub started before the passage of the Inflation Reduction Act in late 2022. Rivian announced plans to build a factory 40 miles east of Atlanta in 2021 and soon after, Hyundai announced its plans for its “Metaplant” outside of Savannah.
Federal incentives have aided the state’s plan to become a clean technology hub. The industry employed 82,000 Georgians as of 2024, according to an industry report.
And although the federal subsidies have accelerated EV and other clean tech in Georgia, GOP state lawmakers and Gov. Brian Kemp haven’t expressed enthusiasm for government tax breaks.
Kemp set out to make the state a leader in producing electric vehicles and parts. But he’s criticized the IRA as a “reckless tax and spending spree.” He’s also said it disproportionately favors particular manufacturers, “picking winners and losers.”
What it would mean for EV owners in Georgia
If the tax bill passes and is signed into law, Georgians would pay more when purchasing some new EVs, and owners of battery-powered vehicles would pay more than $450 annually between state and federal fees.
Credit: Hyosub Shin
Credit: Hyosub Shin
Longtime EV advocate Don Francis, who works at an e-mobility nonprofit, is conflicted about the congressional bill. On one hand, he said the EV tax credit should end at some point.
On the other hand, Francis said, the proposed annual fee is not comparable to how much people pay in taxes at the gas pump over the course of a year.
“It makes you want to think about, well, maybe I need to get a gas guzzler and save some money,” he said.
Francis said that the annual fees are shortsighted, as more people are shifting away from gas-powered vehicles and purchasing EVs.
The more than 1,000-page bill could significantly change in the Senate, where Republicans can only afford to lose a few votes. Congressional Republicans are hoping to pass the legislation by July 4.
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