The sunset of the tax credit for EVs is the most talked-about provision in the Trump administration’s One Big Beautiful Bill (OBBB) regarding fleets and the broader automotive industry. 

But digging into the bill uncovers other provisions, from fuel policy to infrastructure, that deserve more attention. 

45W Tax Credit Elimination Will Hurt

Removing the $7,500 tax credit for new EVs (and $4,000 for used) under IRA’s Section 30D will have a chilling effect on electric passenger vehicle sales. But the effects might not be as severe as the media portrays them. Manufacturers will adjust prices a bit to soften that MSRP bump. And for fleets, more rational, market-based pricing may actually help residual values in the long run. 

Electric passenger vehicles — and I’d add electric cargo vans — are already starting to make TCO sense without the credit. However, eradicating Section 45W, which provided up to $40,000 for electric vehicles over 14,000 GVWR, is a major blow to the nascent electric commercial vehicle market. 

The electric truck makers in Class 4 to Class 6 are mostly startup independents. It’s a crowded space vying for a sales pie that is only growing incrementally. 

Rebates and incentives are still out there for commercial EVs, but losing 45W will further disincentivize fleets to take a chance on an electric truck, particularly as the EPA and CARB’s regulatory stick is largely gone. 

Market Effect on California Public Fleets 

The OBBB’s aggressive dismantling of clean energy support will damage the vendors supporting clean energy, though the full effects remain to be seen. 

Layer this dynamic on the regulatory environment in California: While private fleets are no longer subject to CARB’s Advanced Clean Fleets (ACF) rule, public fleets still must comply with ACF’s aggressive timeline to incorporate zero-emission vehicles. 

What percentage of the current vendor community, from EV chassis makers to infrastructure providers, can survive in a market that is losing its support? How will government fleets manage acquiring new EVs with a constricted vendor base and potential bankruptcies of the vendors they’ve contracted?

Loss of Regulatory Credits to Hit Tesla’s Income

The latest feud between Elon Musk and President Trump seems to revolve around the dumping of the EV tax credit. Yes, ending the credit will impact EV sales, but the adage “I’m for what hurts me less than my competitors” is apropos for Tesla. 

The real story is tied to another part of the OBBB — the removal of automaker penalties for not meeting U.S. Corporate Average Fuel Economy (CAFÉ) standards. Tesla was the beneficiary of those penalties in the form of regulatory credits. In 2024, Tesla earned about $2.76 billion through credit sales, which accounted for about 38.7% of net income. Imagine that net income disappearing in one year. 

Thankfully, No Registration Fee on Hybrids

The House bill proposed a $250 annual registration fee for EVs and a $100 fee for hybrid vehicles to help make up shortfalls in the Highway Trust Fund. Luckily, this provision was stripped from the final bill. 

Yes, we need to address the shift in gas tax revenues. But a $100 fee for a hybrid vehicle, like a Toyota Prius or Honda Insight? Give me a break. File that one under “overly punitive measure that thankfully won’t come to pass.”

Except… 

Forced Sale of Electric Mail Trucks

Here’s a punitive measure that is in the bill: A provision in the bill forces the USPS to sell off the 7,200 new electric mail trucks that it has already fleeted and unwind the contract for the remaining 58,800 trucks to be delivered over the next 10 years. 

Go ahead and ease regulations — but forcing the sale of those vehicles? To whom? And buy new ones? This is going to cost taxpayers. Those vehicles are made in Oshkosh, Wisconsin. Way to kill American jobs. This may not be enforceable. We’ll see. 

Auto Loan Interest Deduction: Not for Fleets

The bill provides some relief to deduct up to $10,000 per year in auto loan interest for U.S.-assembled vehicles purchased between 2025 and 2028. If you thought this would be available to commercial customers, it’s not. 

The Energy Crunch Just Got Worse

The OBBB phases out solar and wind tax credits and mandates (not “incentivizes” but “mandates”) oil and gas lease sales, while slashing royalties for producers. It also makes more federal land available for coal mining.

The attack on renewables will likely kill projects. Solar and onshore wind are the cheapest new power sources and can be brought online relatively quickly. Meanwhile, it takes at least five years to go from plan to drilling for a new oil and gas project. 

Setting aside the environmental arguments, if we want to invest in all forms of energy production, we’ll need renewables too. Our power needs are increasing exponentially right now. Remember when we thought EVs would be the big power drain? Those new AI data centers suck up the power of a medium-sized city. 

While zero-emission vehicles are expected to use about 6% of electricity demand by 2030, AI is expected to take 11.7%, according to Kinsey’s estimates. 

The coming spike in energy demand will raise prices for consumers and fleets. 

Expect Uncertainty

Though it’ll take some time to understand the ultimate impacts of OBBB, the only certainty seems to be more volatility ahead, particularly as the 2026 vehicle procurement season approaches.

We’ll continue to monitor the policy shifts to help shape your procurement strategy.