Electric Car Tax Credits End: What’s Next for EVs?
▼ Summary
– The US government ended federal tax credits for electric vehicle purchases and leases in July through the One Big Beautiful Bill Act.
– EV sales surged before the credits expired but are expected to decline in the coming months without the incentives.
– Automakers like Ford and GM are offering $7,500 credits on leases by using their finance companies to purchase vehicles while credits were active.
– Hyundai is providing price cuts up to $9,800 on its 2026 Ioniq 5 to effectively match the expired tax credit benefits.
– Industry experts believe the loss of credits may dampen buyer enthusiasm, but new EV models could help the market recover.
The recent expiration of federal tax credits for electric vehicle purchases marks a significant shift for the American automotive market, creating new dynamics for both consumers and manufacturers. Industry analysts suggest that while the loss of incentives may temporarily slow buyer interest, a wave of new and redesigned electric models could soon reinvigorate demand.
According to Stephanie Valdez Streaty, director of industry insights at Cox Automotive, the market needs time to adjust. “I think the dust needs to settle for everyone to figure out what’s going to happen near term,” she remarked, highlighting the uncertainty following the policy change.
Previously, buyers could receive up to $7,500 for a new EV purchase, $3,000 for a qualifying used EV, and a similar $7,500 incentive on new EV leases. These benefits were eliminated with the July passage of the One Big Beautiful Bill Act, legislation that rolled back various clean energy supports as part of broader fiscal adjustments.
In the months leading up to the deadline, EV sales saw a notable uptick as customers rushed to secure credits before they lapsed. Experts now anticipate a decline in sales throughout the remainder of the year due to the absence of these financial incentives.
Automakers, however, are not standing idle. Ford and General Motors have announced they will continue providing a $7,500 credit on leases. This is possible because their internal financing arms purchased the vehicles while credits were still available, allowing them to extend those savings to consumers even after the October 1 cutoff.
Hyundai has launched its own aggressive promotion, offering the 2026 Ioniq 5 with price reductions reaching $9,800 on both purchases and leases. This strategy effectively matches the former tax credit value while providing additional savings, cushioning the impact for potential EV buyers.
(Source: Ars Technica)
