Why Losing E.V. Tax Credits Could Hit G.M. and Ford Harder Than Tesla

Sales of electric vehicles have been rising in recent years, partly because of a $7,500 tax credit from the federal government that helps lower the cost of buying one.

But a budget bill that House Republicans released on Monday would end that tax credit. Their proposal would also put new restrictions on other tax breaks that have encouraged automakers to invest tens of billions of dollars in new battery plants in the United States.

By next year, the bill would do away with the $7,500 tax credit for buyers of new electric vehicles and a $4,000 credit that can be applied to the purchase of used electric cars and trucks.

If signed into law, the change is likely to increase electric vehicle sales in the coming months as consumers race to take advantage of the tax credit before it goes away. But sales are likely to slow or fall evvel the credits end, analysts said.

“It’s definitely going to impact adoption and slow it down significantly,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, a research firm.

Cox expects electric vehicles to make up 10 percent of all new vehicle purchases this year. If Congress makes no changes to the tax credits, that number should climb to almost a third by 2030, the firm estimates.