On the surface, legislation that kills the $7,500 tax credit for new electric-vehicle purchases doesn’t look like a big deal for Rivian.
As of this year, consumers who buy a new Rivian R1T pickup or R1S SUV made in Normal aren’t getting the tax credit anyway. That’s because the price tag for a new Rivian is above the $80,000 cap to get the credit. (Business buyers could still get it.)
But the fate of the EV industry – and, indirectly, the Bloomington-Normal economy – is a lot more interconnected than that one thing. That means there’s a lot at stake for the Twin Cities in the House-passed One Big Beautiful Bill, which would cut incentives for EVs.
“Any impact on consumer demand, or the supply of vehicles, or the supply of infrastructure can have great ramifications on how fast we can transition to electric vehicles,” said Eleftheria Kontou, an assistant professor in civil and environmental engineering at the University of Illinois Urbana-Champaign who has studied EV demand.
Currently, buyers can get up to $7,500 in tax credits for certain new EV purchases, and $4,000 for a used EV. That might've helped Rivian when it launches its lower-cost R2 model sometime in 2026, which will sell for well below the $80,000 cap.
The version of the One Big Beautiful Bill that passed the House would eliminate those tax credits. They've long been a target of President Trump and other Republicans who consider them wasteful spending. They argue the market, not the government, should determine what people drive.
A Princeton study estimated that if the tax credits are repealed and federal emissions regulations are cut, as the White House has signaled it also plans to do, sales of EVs in 2030 could be 40% lower than they would have been. Kontou tends to agree.
“There’s of course still market momentum, because consumers understand the electric vehicles are cheaper to operate. They’re much more energy efficient. And there are other performance benefits. If you drive an EV, you know how easy they accelerate. It’s a different experience,” Kontou said.
One criticism of EV tax credits is that they primarily help wealthier car buyers, because new EVs are expensive. Kontou says even that can have positive trickle-down effects.
“They can bring down the prices of batteries, because demand increases. [They] help solidify the market so that you can justify investments in building electric vehicles. And, of course, as more and more people become familiar with electric vehicles, prices drop, then a greater set of consumer segments can access these vehicles. We can see that this happened very fast in the past 10 years,” Kontou said.
The One Big Beautiful Bill takes aim at EVs in other ways. It would also add a new $250 annual fee for EV drivers, hypothetically meant to correct for the fact that EV drivers don't pay gas taxes.
However, Consumer Reports has calculated that the proposed fee is more than three times what a typical driver of a new gas-powered car pays in gas tax. Kontou is also skeptical of the $250 math.
“I’m not convinced the comparison is fair. We’d need to see that that is the case,” she said.
WGLT asked Kontou what inside the One Big Beautiful Bill would impact Rivian most. She theorized it might be disinvestment in charging infrastructure.
Indeed, Illinois’ chief EV officer Megha Lakhchaura says the legislation would eliminate a 30% tax credit for charging stations in specific areas. She says the areas most affected will be primarily rural communities and underserved regions that currently lack adequate EV infrastructure. She's urging developers and utilities to move quickly and get charging stations installed by Dec. 31 so they don't lose that tax credit.
“Consumer could be left perplexed with charging decisions. And this could impact accessibility for them, and I’d foresee that Rivian and other auto manufacturers will be affected by these secondary impacts,” Kontou said.
Whether those secondary impacts actually happen depends on if the One Big Beautiful Bill actually passes. It's already run into opposition from hardline conservatives in the Senate.
