On July 3, 2025, Congress passed legislation that will terminate the $7,500 federal tax credit for new electric vehicle (EV) purchases or leases and the $4,000 credit for used EVs, effective September 30. This decision, reported by Reuters, marks a pivotal shift for EV owners and the automotive industry, potentially slowing the U.S.’s transition to electric transportation.

Background on EV Tax Credits

Introduced in 2008, the $7,500 tax credit aimed to boost EV adoption by reducing upfront costs. Initially capped at 200,000 vehicles per manufacturer, the credit was expanded in 2022 to include leased vehicles and remove the cap, spurring sales. The $4,000 used EV credit further broadened access. These incentives have driven EV market growth, with EVs now holding a significant share of global automotive sales.

Implications for EV Buyers

The impending expiration is expected to trigger a short-term surge in EV purchases. Barclays analyst Dan Levy predicts a “pre-buy” rush as consumers accelerate planned purchases to secure the $7,500 credit before September 30. However, Levy warns of a subsequent sales drop, noting, “The bill reiterates the slowdown ahead for EV penetration in the U.S., with both the ‘carrot’ (i.e., tax credits/incentives) and the ‘stick’ (i.e., emissions regulations) softened.” This could raise EV costs, making them less competitive against gas-powered vehicles. For example, a $40,000 EV would effectively cost $47,500 without the credit, potentially deterring budget-conscious buyers.

U.s. Electric Vehicle Tax Credits Set To Expire September 30, Impacting Ev Sales

Industry and Economic Impacts

The legislation also eliminates penalties for automakers failing to meet Corporate Average Fuel Economy (CAFE) standards, easing production of gas-powered vehicles. This benefits traditional automakers like Stellantis, which paid $190.7 million in CAFE penalties for 2019–2020, and General Motors, which paid $128.2 million for 2016–2017. By removing these penalties, the bill reduces financial pressure on automakers to prioritize EVs, potentially slowing innovation and production.

A Harvard University study from March 2025 projects that ending the tax credits will reduce EV market penetration by 6% by 2030, saving the government $169 billion over a decade. However, the Electrification Coalition criticized the move, stating, “As EVs secure a growing share of the global automotive market, it is obvious that the future of transportation is electric; this bill forfeits America’s role in that future to China.” This suggests a competitive disadvantage for U.S. automakers against global leaders like China, where EV incentives remain robust.

Regulatory and Infrastructure Shifts

The bill scrapped a proposed $250 annual EV fee for road repairs, sparing owners additional costs. It also dropped a requirement for the U.S. Postal Service to sell its EV delivery vehicles, preserving federal investment in electric fleets. These decisions reflect a mixed approach to EV policy, balancing industry relief with reduced consumer incentives.

De cara al futuro

The tax credit phase-out could reshape the EV landscape, challenging affordability and adoption. While short-term sales may spike, the long-term outlook points to slower growth unless new incentives emerge. For EV enthusiasts and owners, the next few months offer a critical window to leverage existing credits before the September 30 deadline.

Fotos por cortesía de Tesla.