EV Tax Credits Set to Expire in September – Here's What Buyers Must Know

(TestMiles) – For many years, federal electric vehicle tax incentives were among the only negotiation tools available in an industry resistant to price reductions. However, a recently enacted federal budget law has eliminated these benefits. President Trump's "Big Beautiful Bill" will terminate electric vehicle and plug-in hybrid tax credits as of September 30, 2025. This gives buyers a limited time this summer to take advantage of potential savings—up to $7,500 for new vehicles and $4,000 for pre-owned ones—before the opportunity expires.

Don’t be mistaken: this isn’t just a short break. It represents one of the strongest federal reversals regarding electricity-powered vehicles ever seen. If you're looking to buy an electric or plug-in hybrid car, time is running out—and so are your chances to save hundreds.

How does it stack up against competitors?

The main competitor at this moment isn't another vehicle—it's time itself. Approximately 20 models meet the criteria for complete federal subsidies, as a result of intricate regulations regarding local production, battery procurement, and cost limits set forth by the 2022 Inflation Reduction Act. Cars such as the Chevrolet Blazer EV, Equinox EV, Silverado EV, along with the Tesla Model 3, Y, and Cybertruck, continue to be eligible. The Hyundai IONIQ 5 and IONIQ 9 manage to qualify through lease agreements, owing to an exception within the law that provides tax credits to the lessor instead of the consumer.

This lease-related gap has turned into a popular strategy within the sector. Several models that aren't eligible for tax incentives when bought outright—like imported electric vehicles—are still able to access these benefits through leasing agreements. However, the issue lies in whether the leasing firm transfers those cost reductions to customers, which isn't always the case. Therefore, buyers ought to inquire clearly prior to finalizing any agreement containing "APR."

Who does this apply to and who might want to avoid it?

If you've been hesitant about electric vehicles, this summer could be the perfect opportunity to make the switch. Newly released electric cars still carry high prices—the typical EV costs around $63,000, which is roughly $13,000 more than a similar gasoline vehicle. Tax incentives have reduced this difference for several consumers. However, these benefits will disappear in October, forcing budget-minded customers to choose between paying the full cost or waiting for car manufacturers to reduce their suggested retail prices on their own.

Consumers searching for "budget-friendly" electric vehicles should pay close attention. The Chevrolet Equinox EV, marketed as an affordable electric SUV under $30,000 with discounts, may experience a significant increase in cost later this year. Meanwhile, Slate Auto, a new company offering a $19,900 electric vehicle, has now adjusted its prices to the mid-20s range. It comes as no shock. The entry-level economical electric car is quickly disappearing from the market.

On the other hand, shoppers who value performance, comfort, or advanced technology more than budget might not be concerned. For these individuals, embracing electric vehicles goes beyond financial considerations—it's about the overall experience. However, you shouldn't anticipate those tax incentives coming back anytime soon. Political priorities have changed, and funding from Washington remains unavailable.

What’s the long-term significance?

This shift might reshape the way and speed at which America transitions to electric vehicles. As of 2025, electric cars account for 7.3% of all newly sold vehicles in the U.S. This percentage had been anticipated to grow consistently thanks to support from the government. However, now without these financial incentives, the outlook becomes less clear.

Car manufacturers such as Ford, General Motors, Hyundai, and Kia have invested billions of dollars into electric vehicle development. Production facilities have been updated, large-scale factories constructed, and dealership staff educated. However, without monetary benefits aimed at attracting customers, particularly those with moderate incomes, consumer interest might slow down. Moreover, even California's regulations requiring zero emissions may encounter resistance from the incoming government.

The electric vehicle sector isn't falling apart. However, it's losing its safety net, and gravity continues to take effect. With federal funding decreasing, attention turns toward cost, charging networks, and customer confidence. Put simply, the EV market has now become an actual marketplace, where consumers will make decisions based on financial considerations without assistance from the government.

If you're thinking about switching to an electric vehicle, act now. Once September 30 passes, the government subsidy will disappear, leaving you to negotiate as before—through cash alone.

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