Tax credits for electric cars are no more. What’s next for the US EV industry?

Guests look at the 2026 Subaru Trailseeker after it was unveiled during a press preview at the New York International Auto Show in New York City on April 16.

Credit:
Timothy A. Clary/AFP via Getty Images

“It’s basically an electric Outback,” he said, referring to one of Subaru’s top-selling and best-known models.

He noted that Subaru has often appealed to consumers who are also likely to be open to buying an EV. So, if the brand ever produces a compelling EV, it should have an eager audience.

I haven’t yet mentioned Tesla, the country’s leading EV brand, which has suffered through declining sales and harmed its image because of CEO Elon Musk’s close association with the Trump administration.

On Tuesday, Tesla announced the introduction of the Model 3 Standard and Model Y Standard, which are more affordable versions of the company’s top two models.

The Model 3 Standard has a base price of $36,990, which is $5,500 less than the Model 3 Premium. The Model Y Standard sells for $39,990, which is $5,000 less than the Model Y Premium.

To reduce the prices, Tesla took steps to cut costs. One notable difference is that the Model Y Standard’s glass roof is only on the outside of the car, while the inside is a solid headliner of sound-absorbing material, creating an effect which Car and Driver describes as “pulling a ‘Cask of Amontillado’ and sealing occupants off from the panoramic glass above.”

Is the lower price going to boost Tesla’s sales and offset the effects of losing tax credits?

It may help a little, but Kim is mostly unimpressed.

“I see it as a post-credit price correction more than anything else,” he said.

Even with a lower price, he thinks the Model Y compares unfavorably in terms of cost and features with the Ioniq 5.

And, as several people have observed this week, Tesla’s price cuts aren’t enough to offset the effect of losing the tax credit, underscoring how the loss of the credit is like a sad trombone playing in the background.

This story originally appeared on Inside Climate News.