Last Chance for Federal EV Tax Credits: Act Now Before Sept. 30 Deadline!
Car buyers interested in electric vehicles have a limited time to take advantage of federal tax credits before they expire on Sept. 30. The federal tax credits, introduced in 2022 under the Inflation Reduction Act, offer $7,500 for new EVs and $4,000 for used EVs. These credits are being phased out due to President Trump's One Big Beautiful Bill Act, which is also ending other clean energy credits. With just one week left until the expiration date, customers are rushing to dealerships to benefit from the credits.
EV sales have surged in anticipation of the tax credit expiration, with new EV sales up 17.7% year over year and used EV sales up 59% in August. Dealerships are seeing increased demand for EVs, with used EVs spending an average of 46 days on lots, indicating rising popularity in the market. To clear out inventory before new models arrive, dealerships are offering incentives like reduced lease rates, some as low as 1% of the car's sticker price.
One dealership in Denver, Emich Volkswagen, is offering EV lease rates as low as $40 a month, prompting customers like Stephen Hynes to make the switch to electric vehicles to take advantage of the tax credit. As the deadline approaches, dealerships are expecting a surge in EV sales, making September 2025 potentially the biggest month for EV sales in history. However, concerns arise about the sales landscape shifting once the tax credit expires in October.
Despite the potential impact of the tax credit expiration on future EV sales, some experts believe that the effect may not be significant due to the relatively low sales volume of EVs. Automakers have already slowed production of electric vehicles in favor of gas and hybrid models, but the long-term impact remains uncertain. As the deadline approaches, car buyers are urged to act quickly to benefit from the federal tax credits before they expire.