Buyers still have time -- but not much if they want to cash in
of ConsumerAffairs-
Federal EV tax credits will end September 30 after being eliminated in Trumps new budget bill
-
Buyers still have time to claim up to $7,500if they act quickly and meet strict eligibility rules
-
Analysts warn of slowed demand, but manufacturers plan deep discounts to stay competitive
Americans hoping to score a federal tax break on a new or used electric vehicle have just two months left, following President Trumps decision to eliminate EV tax credits as part of his sweeping budget bill signed into law on July 4.
The move abruptly ends the Clean Vehicle Credit, which previously offered up to $7,500 for the purchase or lease of a new qualifying EV and $4,000 for used models. While the credits were originally scheduled to remain in effect through 2032 under the Biden administrations Inflation Reduction Act, they will now expire on September 30, 2025.
To qualify, buyers must meet income and vehicle eligibility criteria, with caps on adjusted gross income, vehicle price, assembly location, and battery sourcing. For instance, new EVs must be under $80,000 for trucks and SUVs (or $55,000 for other vehicles), assembled in North America, and include battery materials sourced from the U.S. or trade partners. Used vehicles must be priced under $25,000, at least two years old, and sold through a dealer.
High stakes for buyers and dealers
Industry insiders say the change is expected to cool short-term EV demand and potentially boost dealer incentives to offset the loss of the federal tax break. According to Cox Automotive, EV incentives reached a record high in Junenearly $8,500 per vehicle, or 14.8% of the average transaction price. Manufacturers aren't expected to give up on rebates, as they have large inventories to get rid of.
Consumer Reports found July discounts as high as 26% on models like the Nissan Leaf, Nissan Ariya, and Volkswagen ID.4, with the Kia Niro Electric and Hyundai Ioniq 5 and 6 not far behind. Many automakers are also offering 0% financing on at least one electric model.
Still, experts caution against rushing into an EV purchase solely to beat the tax credit deadline.
EVs are great, but they require a shift in mindset, said Chris Harto, senior energy policy analyst at Consumer Reports. If youre not ready for that, it can be a bit of a barrier.
While the immediate effect of the tax credit cut may be a flattening in EV sales, industry leaders say the electric transition is far from dead. According to the International Energy Agency, EVs are expected to make up 25% of the global vehicle market in 2025.
In the U.S., Cox Automotive has lowered its EV sales forecast to 8.5% of all new vehiclesdown from 10%but still anticipates gradual growth driven by declining production costs, expanded charging infrastructure, and consumer-friendly pricing.
Final tips for consumers
-
Act fast if you plan to buy and qualify for the creditSeptember 30 is the final deadline
-
Check eligibility for federal, state, and local incentives
-
Compare prices and financing offers as many brands ramp up rebates
-
Dont rushmake sure you're ready for EV ownership, including charging needs and driving habits
For a full list of qualifying vehicles and additional information, visit the U.S. Department of Energys FuelEconomy.gov.
Posted: 2025-07-30 19:25:38
