Automakersare urging customers to snap up electric vehicles before a$7,500U.S.tax credit goes away this fall.
Tesla’shomepage on Tuesday displayed a banner: “$7,500Federal Tax Credit Ending. Take Delivery bySeptember 30, 2025.”
The same day,FordMotor extended its deal for free home chargers and installation through the end of September to entice EV shoppers.
Sweeping tax and budget legislation approved byCongresswill eliminate$7,500tax credits for buying or leasing new electric vehicles and a$4,000used-EV credit at the end of September. The subsidies have boosted EV sales in recent years, and some dealers and analysts expect shoppers to rush to take advantage of the credit before it expires.
“This is certainly a great time to be considering an EV,”Rivian’sfinance chiefClaire McDonoughsaid in an interview on Tuesday. Once the tax credits end,Rivianmight introduce additional incentives, including financing deals, depending how the broader industry reacts, she said.
Demand for battery-powered models already has slowed after rapid growth earlier this decade. Sales could drop after the credits dry up, auto executives and analysts have warned.
“The$7,500tax credit is driving demand; without that, that’ll slow,”General MotorsCEOMary Barrasaid at an event inDecember 2024.
Electric vehicle registrations could fall 27% without the tax credit, according to a joint study in November from professors at theUniversity of California, Berkeley;Duke UniversityandStanford University.
Such policy shifts have affected EV adoption in other countries. EV sales fell sharply inGermanyafter subsidies ended in late 2023.
Congressapproved a$7,500tax credit in 2008 for electric cars and plug-in hybrid vehicles. The 2022 Inflation Reduction Act extended the credit, while also limiting eligibility to EVs built in theU.S.that use certain levels of domestically sourced batteries and materials.
“We believe (the third quarter) will see a significant EV pre-buy, with sharp declines in the months to follow,” said Barclays analysts in a note.
Dmitry Agapitov, sales manager atNorthwood Chevroletand Hyundai inEureka, California, cited major sales bumps at his dealership ahead of past deadlines, including in spring, as buyers shopped to avoid tariff-related price hikes. He expects a similar sales spike this time.
“We’re anticipating it to play a factor,” he said.
Battery-powered models could get a much-needed jolt. EVs have been a hard sell because of concerns around insufficient charging infrastructure and high prices, surveys show. A new EV sold for about$58,000on average in May, almost$10,000more than the average new price across the industry, according toCox Automotivedata.
U.S.PresidentDonald Trump’steam has been strategizing since late 2024, before his inauguration, about how to kill tax credits for electric vehicles. Some consumers took early notice and bumped up their EV purchases.
“If there’s anyone who hasn’t bought their EV yet, they’re likely to be encouraged to buy in the third quarter. Consumers believe there is a deadline to reach now,” saidSam Fiorani, vice president at research firm AutoForecast Solutions.
In the past,automakershave increased consumer incentives to help offset the loss of tax subsidies.Fordslashed prices on its Mustang Mach-E after it lost a$3,750tax credit inJanuary 2024and sales dropped.GMoffered a$7,500incentive on vehicles that lost the credits.
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