Three ways Trump’s tax bill will change U.S. truck market

Trump’s tax bill was signed into law and it has three significant ways it will change the U.S. truck market.

Trump’s Big Beautiful Bill

The bill was signed into law on July 4, 2025 and includes several changes to the tax code including several significant changes for the automotive market.

These changes will significantly impact everything from consumer buying, automaker’s capital investments and tax savings for consumers.

These aren’t future changes either, they take effect now or in the coming months.

CAFE fines ended

The Corporate Average Fuel Economy (CAFE) program, signed into law in 1975, was in response to the Iran Oil crisis. This program was aimed at improving fuel economy, reducing dependence on foreign oil and thereby improving national security.

A key part of the program was the use of fines to make automakers comply with higher fuel economy standards.

“These proposed changes effectively gut the popular CAFE program, turning it into nothing more than an accounting requirement with no teeth,” Chris Harto, senior policy analyst at Consumer Reports, said in a statement when the Senate text was originally released. “Without an enforcement mechanism, many automakers are likely to continue to leave proven, popular, and cost effective technologies sitting and gathering dust on the shelf, rather than deploying them to save consumers money at the pump.”

The program has faced criticism in recent years with consumers questioning how far automakers have been forced to go with technology they see as increasingly unreliable. Trucks, specifically, have never been more fuel efficient.

Electric vehicle credit ending

First is the change in the EV credit ending on September 30, 2025.

This EV credit provided a credit of $7,500 when purchasing a new EV and $4,000 for used EVs. Automakers and dealers had requested a longer timeframe to end the credit.

Dealers stated they had 14,000 vehicles on lots and this credit is a primary buying reason for EV shoppers.

Plus, automakers have pledged billions, if not trillions of dollars in new plant construction and jobs for future EV vehicles.

Without this EV credit, analysts see the EV market seeing a significant downturn.

New EV startups like Scout and Amazon-backed Slate Auto could face significant issues getting their business going.

Auto loan interest deduction

The final piece impacting the U.S. truck market auto loan interest deduction. This is up to $10,000 of loan interest that can be deducted if the vehicle meets certain requirements.

It starts with the 2025 to 2028 tax year for qualified taxpayers and it is an “above-the-line” deduction meaning even those who take the standard deduction and don’t itemize will get the tax benefit.

The requirements are:

• Eligible vehicles must be assembled in the U.S.
• Manufactured primarily for use on public streets, roads, and highways
• Car, minivan, van, sport utility vehicle, pickup truck or motorcycle
• Vehicle must have a gross vehicle weight rating of under 14,000 pounds
• Does not apply to a commercial vehicle

According to the New York Times, the only buyers who could receive the maximum deduction are those with new car loans of $110,000 or higher. The publication quoted Jonathan Smoke, an economist at market research firm Cox Automotive, who said that just one percent of loans in the U.S. are over that mark.

What does this mean for the truck market? Full-size trucks from mid-grade to so-called luxury truck buyers will get a tax benefit. It will be more beneficial for some buyers to buy new versus buying slightly used for the tax savings if it puts them in a lower tax brackets. This will be especially the case with the higher-dollar trucks. Those trucks are built in the U.S.

The lower-end trucks are often the ones built in Mexico and the lower price will make them not matter to this new bill.

Our take

It is likely people will read this article and think automakers will immediately end things like cylinder deactivation, kill turbocharged engines, direct injection, etc… And Dodge and Ram will Hellcat everything again. It is hard to see some of those immediate changes.

For starters, U.S. Presidential terms are short compared to automaker’s plans. And second, new truck sales are consistently doing well for automakers with the new technologies. Third, they use these technologies globally in larger markets like China that comply with Euro 6 emissions standards.

As with any legislation, the unintended consequences is always the more interesting things to watch play out. What will happen in the next year? Grab your popcorn.