The Trump administration is making ready to finish Biden's electrical automobile tax incentive

If you're looking to buy or lease an electric vehicle (EV) and take advantage of the Biden administration's $7,500 tax credit, you'll want to act quickly.

The new Trump administration's transition team is already planning to end the loan, a Reuters report said, citing sources with direct knowledge of the matter.

Under the Biden administration's Inflation Reduction Act (IRA), an electric vehicle with key components made in the United States, including batteries, is eligible for the incentive when purchasing or leasing the vehicle.

Electric vehicles recently accounted for 6.8% of all vehicles sold in the U.S., up 1.6% from 2022, when the IRA was passed. By some estimates, electric vehicles should grow to 33% of the U.S. market by 2030. However, following the results of the US presidential election, these estimates have now fallen to 28% of the market.

Despite the expected decline in electric vehicle sales, Trump's plan to end the incentives received the blessing of officials at Tesla, the top-selling electric vehicle maker in the United States, sources cited in the Reuters report said. Tesla CEO Elon Musk was recently appointed by the new administration to head a newly created “Department of Government Efficiency.”

In July, Musk was asked if he thought ending the incentive could hurt Tesla sales.

“I appreciate there would be some impact, but I think it would be slightly devastating for our competitors and for Tesla,” Musk said during a call with investors. “In the long term, [this] “Probably actually helps Tesla,” he added.

In addition to the tax incentive, the Biden administration this year imposed 100 percent tariffs on Chinese-made electric vehicles, which are leading the global race to make electric vehicles affordable. Keeping them out of the U.S. will already limit competition and cap EV prices domestically.

Tesla's Musk recently said that reducing the price of a regular Tesla model to $25,000 was “pointless” and “silly.” Tesla, Musk said, believes “the future is autonomous,” referring to the recent launch of its self-driving vehicle, Robotaxi.

Some rival electric vehicle makers, meanwhile, are trying to move more aggressively into the affordable space in the United States

General Motors has already launched its Chevy Equinox EV priced at $27,500, including federal tax credits. Volkswagen America plans to launch an electric car in the U.S. for under $35,000 by 2027.