TN EV Industry Uncertainty: Fed Tax Credits Set to End

by: Tori Gessner

Posted: Sep 24, 2025 / 04:41 PM CDT

Updated: Sep 25, 2025 / 05:24 AM CDT

NASHVILLE, Tenn. (WKRN) — Buying an electric vehicle may not be as beneficial for your bank account starting at the end of the month, and some believe the change could impact the Tennessee's electric vehicle industry.

The $7,500 federal tax credit for purchasing a new EV, and the $4,000 tax credit for purchasing a used one, will disappear Sept. 30. The cuts were included in the "Big Beautiful Bill" passed by Congress in July. Some believe it may put the breaks on the EV industry's momentum in Tennessee.

"Those are both really important consumer incentives to encourage folks to take a closer look at an electric vehicle, and those will be going away at the end of the month," Aaron Viles, senior director of campaigns for the Electrification Coalition, said.

According to the Tennessee Department of Economic and Community Development, the state has made more than $16 billion in capital investments in the EV industry since 2017. Additionally, more than 191,000 EVs have been produced in TN since 2013 by the four major EV manufacturers located in the state.

Viles told News 2 the exact impact of the federal tax credit cuts on Tennessee's EV industry is unclear, but any impact will likely be short-lived.

"Obviously, if you take away a $7,500 or $4,000 tax credit, there will be fewer people who make that decision [to buy EVs]," Viles said. "It will be interesting to see how many fewer, but I think overall because manufacturers are still very committed to this transition [toward EVs], that ultimately EVs — there will be more and more on the roads."

Some experts have also predicted potential manufacturing job loss due to the elimination of the tax credits. According to a recent report by the Southern Alliance for Clean Energy, Tennessee has already lost nearly 150 EV manufacturing jobs within the past 12 months due to cancellations or down-scaled investments.

However, the state remains among the top in the country for the most anticipated EV manufacturing jobs, the report said.

Despite that, multiple EV manufacturers in the Volunteer State have slowed or delayed EV production in recent months due to slower sales, including Ford's EV plant — known as BlueOval City — located just outside of Memphis.

"In Tennessee, there's a lot of skin in the game because it's one of the bigger states in terms of those EV investments, so we'll all need to watch pretty closely and carefully and see what the companies decide to do," Viles said.