It’s a race against time before the EV tax credit is dead, as you only have until September 30, 2025, to qualify for it. However, the IRS has given us some good news, for once, with some clarifications that may give you more time than you expected to take advantage of this expiring offer. All you need to qualify for the credit is to have signed a contract and made a payment, even if you take delivery of your EV after September 30.
This is a change from how the IRS has handled such credits in the past. NPR explains that if a particular vehicle qualified for a tax credit in 2024 but is not among the eligible vehicles in 2025, customers had to take delivery of the vehicle before that deadline to qualify. If there were delays that pushed delivery past the deadline, even by one day, the customer was out of luck, even if the delays were not their fault. As the end of the EV credit approaches, it’s natural to assume it will work the same way. That’s why the IRS clarification that this is not the case is so important.
Borrowed time
While not really an extension, this interpretation gives both consumers and automakers a little breathing room to make a deal on an EV. CBT News says this means buyers won’t have to worry about buying a car from out of state, or special ordering one that may not be delivered or even built by the time the deadline passes. It also means automakers have a little more time to sell EVs that won’t be worth buying after the credit expires.
This guidance applies to both the new EV credit for up to $7,500 as well as the used EV credit for up to $4,000. Leasing may be worth considering, which also qualifies for the $7,500 credit. Your monthly payments will likely be lower, and depreciation isn’t your problem if its resale value drops like a rock because the EV credit is gone and fuel economy regulations will no longer be enforced. As long as you’ve signed on the dotted line and put down a payment–and a trade-in counts as that payment–by September 30, you’re good to go. Just keep in mind that while you will qualify for the EV credit, you still will not be able to claim it until you take delivery of the vehicle, whenever that is.