If youre looking to buy or lease an electric vehicle (EV) and benefit from the Biden administrations $7,500 tax incentive, youd better act soon.

The transition team of the incoming Trump administration is already planning to end the credit, according to a report from Reuters, citing sources with direct knowledge of the matter.

Recommended Videos Under the Biden administrations Inflation Reduction Act (IRA), an EV whose key components, including batteries, are made in the U.S., is eligible for the incentive upon purchase or lease of the vehicle.

Related EVs recently accounted for 6.8% of all vehicles sold in the U.S., up 1.6 percentage points from 2022, when the IRA was passed. According to some estimates, the share of EVs was expected to grow to 33% of the U.S. market in 2030. But following the results of the U.S. presidential elections, those estimates are now down to 28% of the market.

Despite the expected hit to EV sales, Trumps plan to end the incentive has received the blessings of representatives from Tesla, the best-selling EV maker in the U.S., sources quoted in the Reuters report say. Tesla CEO Elon Musk was recently appointed by the incoming administration to lead a newly-created Department of Government Efficiency.

Back in July, Musk was asked if he thought ending the incentive might hurt Tesla sales.

I guess that there would be some impact, but I think it would be devastating for our competitors and for Tesla slightly, Musk said during a call with investors. Long term, [this] probably actually helps Tesla, he added.

Besides the tax incentive, the Biden administration this year imposed 100% tariffs on Chinese-made electric vehicles, which are leading the global race in making EVs more affordable. Keeping those out of the U.S. will already limit competition and put a floor on EV prices domestically.

Teslas Musk recently said that lowering the price of a regular Tesla model down to $25,000 would be pointless and silly. Tesla, musk said, believes the future is autonomous, referring to the recent launch of its Robotaxi self-driving vehicle.

Some rival EV makers, meanwhile, are trying to enter the affordable space more aggressively in the U.S.

General Motors has already released its Chevy Equinox EV at a price of $27,500, including federal tax credits. Volkswagen America says it plans to release an under-$35,000EVin the U.S. by 2027.

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