Donald Trump and his merry band of Republican sycophants are poised and ready to kill the $7,500 electric vehicle tax credit this fall, but before that happens, automakers in the U.S. are doing everything they can to move as many EVs as possible. By throwing in extra incentives like price cuts and EV charging credits, car companies are hoping to entice as many people as possible to buy their EVs before they get more expensive thanks to Trump’s reconciliation bill.
Tesla CEO Elon Musk — who has had a very serious falling out with the President — really wants buyers to know the tax credit is going away. When you head to Tesla’s website (which you shouldn’t do), you’re greeted with a massive banner that reads “$7,500 Federal Tax Credit Ending. Take Delivery by September 30, 2025.” Ford is also extending its deal for free home chargers and installation through the end of September to get more possible EV buyers on board, according to Reuters.
Rivian’s CFO told the outlet that it is a “great time to be considering an EV,” but she added that once the tax credits end, Rivian may end up introducing additional incentives to keep demand for its EV from stagnating. From the looks of the market, battery-powered vehicle sales and leases have slowed from the rapid growth they saw earlier this decade. It won’t be much of a surprise if they dip even further when the credits go away at the end of September. General Motors CEO Mary Barra agrees, telling Reuters that the tax credit is “driving demand,” and without it, sales will “slow.”
What could come next
A study done at the end of 2024 by professors at UC Berkeley, Duke and Stanford showed that EV registrations could eventually fall by 27% without the aforementioned tax credits, according to Reuters. Similar policy shifts have happened in Europe, and that has led to a sizable downturn in EV take-up. “We believe [the third quarter] will see a significant EV pre-buy, with sharp declines in the months to follow,” a Barclays analyst told Reuters.
This all makes a hell of a lot of sense. I mean, the average EV costs about $58,000, nearly $10,000 more than the average gas vehicle. A $7,500 tax credit for buying and a $4,000 credit for leasing go a long way to making up that difference. I suppose the moral of the story is that if you want an EV, you’re really going to need to act fast. Trump and his cronies would much rather you pay more money for the car you want to buy.
We’ve talked a lot about how killing these tax credits is going to hurt the industry. Earlier this week, we told you about the new issues facing Slate Automotive now that its little electric truck is significantly more expensive. We also talked about how registrations for EVs are surging as people rush to take advantage of the fleeting deal. If you do want to buy a used EV, check out our explainer on how to claim a tax credit for your purchase.