Final Chance for $7,500 EV Tax Credit Before September Deadline

The federal electric vehicle tax credit (valued at as much as $7,500 for new EVs and $4,000 for used EVs) is officially set to expire on September 30, 2025. For more than ten years, these incentives have been central to artificially supporting EV purchases, nudging consumers toward electric cars with taxpayer-funded subsidies.

The One Big Beautiful Bill Act phased them out, and the marketplace is bracing for a substantial shift. Let the free market be truly free. Buyers should choose what they want, not what state or federal authorities prefer.

For purchasers, the deadline presents a straightforward decision: buy an electric vehicle now to lock in the final available credits, or wait and confront a market in which EVs must compete without federal backing.

For dealers and automakers, the termination of this program ushers in a new era in how cars are promoted, priced, and sold in the U.S. This is actually positive news for everyone.

The EV tax credit was initially created to jumpstart demand for electric vehicles, help manufacturers reach scale, and entice drivers to consider electric models. Automakers such as Tesla, GM, and Nissan were early beneficiaries, as subsidies encouraged early adopters to try the new technology.

Over time, the credit became a routine talking point at dealerships and a linchpin of federal and some state policies designed to accelerate the shift to EVs and the aim of phasing out gas- and diesel-powered vehicles.

But the credits also provoked controversy. Critics claimed they disproportionately aided wealthier households, who were more likely to afford EVs even without subsidies and thus more able to benefit from the tax credit.

Many Americans noted that taxpayers who never bought an EV were subsidizing those who did. By 2024, as EV sales slowed despite the continuing credit, doubts intensified about whether the program was producing meaningful outcomes.

Under the OBBBA, the federal EV tax credit ends September 30, 2025. After that date, buyers will no longer be eligible to claim the tax credit of up to $7,500 on new EVs, $4,000 on used ones, or the $1,000 credit for a home charger. This change removes the point-of-sale rebates that dealers have relied on heavily to close EV transactions.

The immediate effect is urgency. Dealers are racing to promote “last chance” offers for buyers to secure the tax credit. Automakers with qualifying models are launching aggressive campaigns to clear inventory before the cutoff. Dealers worry they will be left with a stockpile of electric vehicles and minimal sales. Buyers who act now could save thousands, but once October arrives, those savings disappear.

Without federal support, the EV market faces a trial. Will demand remain steady, or will sales cool once the financial incentive is gone? Industry analysts are split. What’s my analysis? I foresee a sharp decline in EV uptake, especially among price-sensitive buyers. I expect demand to fall below a 4% purchase rate in the US.

Others argue the market will gradually stabilize as more affordable EV models enter production and as states continue to offer their own incentives. The challenge is battery costs, higher insurance rates, and substantial increases in electricity prices.

Dealers are preparing for the likelihood that EV sales will slow significantly. Many are already shifting emphasis to hybrids and conventional gas-powered vehicles, which continue to dominate American driving habits. There is another way for new car buyers to save: an auto loan interest deduction under the OBBBA, available for U.S.-assembled vehicles of all types, has become a more important sales tool than the expiring EV credit.

One often-overlooked consequence of the EV credit’s end is its effect on manufacturing strategy. Automakers spent years adjusting production to maximize eligibility, ensuring vehicles met North American assembly requirements to qualify for the credit.

With that incentive gone, firms will have more flexibility in where and how they manufacture EVs. Car companies absorbed massive losses on many vehicles they sold. Some lost $40,000 on every Lightning truck; other brands suffered comparable losses. This is not sustainable business practice. It forced automakers to raise costs across their vehicle lineups, making it harder for many consumers to afford a new car.

At the same time, the OBBBA’s emphasis on U.S.-assembled vehicles for loan interest deductions keeps domestic production in focus. Buyers financing new American-assembled cars (whether electric, hybrid, or gas-powered) stand to receive meaningful tax savings even after September 30. In effect, the policy is shifting the incentive away from the type of vehicle you purchase and toward where it is manufactured.

For consumers, timing is crucial. Buyers serious about purchasing an EV should act before the deadline to secure the last available credit. Still, it’s equally vital to determine whether the vehicle makes financial sense over the long run without subsidies. Considerations like charging infrastructure, battery replacement costs, and resale value remain important. Resale value on used electric cars is not good.

Some households may find more benefit in waiting. As the market recalibrates, automakers may respond with price cuts, new financing programs, or their own incentives to sustain demand. Dealers will be highly motivated to move EVs off lots if inventory stalls, potentially creating better bargains. Leasing would be your smartest move at that point.

The phase-out of EV tax credits is more than a budgetary or political shift. It signals a broader change in bipartisan policy. For years, Washington used subsidies to steer the auto market toward electrification. If they missed the targets they were fined billions of dollars. Now, the focus is moving toward empowering buyers with broader tax relief, such as the new loan interest deduction, while reducing federal reliance on technology-specific incentives.

Whether this produces a more balanced marketplace or a setback for EV adoption remains to be seen. What is certain is that the market will now have to stand on its own. Automakers that can deliver dependable, affordable vehicles without relying on subsidies—and can produce what consumers want—will prevail.

September 30 is a clear inflection point. For buyers, it is the final opportunity to claim thousands of dollars in federal support for an EV purchase. For automakers and dealers, it is the end of a crutch that has shaped sales tactics for more than a decade. And for the broader economy, it marks the start of a new approach—one that rewards American manufacturers and consumer choice rather than federal pressure for a single technology or propulsion type.

Can the EV market sustain momentum without subsidies, especially in North America? What is certain is a big win for customer choice.