Amid the ongoing uncertainty triggered by the global trade war, one of the most salient developments of recent weeks was the U.S. tax and spending legislation, officially called the “One Big Beautiful Bill Act.” It envisages significant tax breaks, which would be financed by cuts in government spending and by the already implemented and planned import tariffs. The bill has narrowly passed the House of Representatives, and once it secures the approval of the Senate, maybe in an amended form, it will land on the U.S. president’s desk to be signed into law.

The jury is still out on the economic consequences of the bill. Time will tell whether the budget deficit widens and, if so, by how much. What seems evident is that one of the most significant casualties is the U.S. clean energy industry, which was boosted by President Joe Biden’s Inflation Reduction Act. The legislation, in its current form, portends a bleak future for the wind, solar and electric vehicle (EV) sectors.

The headwinds facing the EV sector will be a boon for those involved in the gasoline market. The chart above illustrates that the broadly uninterrupted rise in the sales of EVs in the U.S. acted as a brake on the growth in gasoline consumption over the past years. (The extreme drop in 2020 motor fuel demand was the function of the obliterated economy precipitated by the health crisis.) Stalling U.S. gasoline demand growth, however, might undergo a revival thanks to the new legislation. Customer credits for EVs will be ended by December 2026 or earlier for manufacturers selling more than 200,000 EVs. A new, inflation-linked fee of $250 will be introduced on EVs to bolster the U.S. Highway Trust Fund, which gasoline taxes have funded. In a separate move, the U.S. Senate revoked the right of the state of California, the country’s biggest EV market, to phase out the sale of fossil fuel cars by 2035.

The trend is clear. As the U.S. EV sector struggles with the new regulatory and legal regime, gasoline consumption is expected to stabilize and may even increase. Of course, the price of U.S. retail gasoline is impacted by a myriad of factors. However, the latest developments might just lay the groundwork for the resurrection of the U.S. gasoline market, the upward revision of gasoline consumption ensuring healthier premiums over crude oil than anticipated last year.