A $7,500 federal tax credit for buyers of new electric vehicles in the United States is set to end on Tuesday after President Donald Trump’s One Big, Beautiful, Bill phased it out seven years earlier than it was originally scheduled to expire. As the deadline approaches, some customers are reportedly jumping at the opportunity to buy an EV before the tax credit is gone.
“We knew with the Sept. 30 deadline, it was now or never, so we did it,” Dan McGrath of Cincinnati told The New York Times. ”The car became much more affordable with the tax credit.”
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Thousands of others are making the same decision. According to data obtained by the Times, EV sales increased 18% last month to nearly 150,000 vehicles. Industry experts predict another jump this month.
Automakers to embrace more hybrid and gas vehicles
Analysts, however, expect EV sales to begin to decline after the current surge, and auto manufacturers are likely to shift production toward more hybrids, as well as gas and diesel vehicles.
Tesla and Rivian, meanwhile, may endure rough patches as the tax credit expires. They gained billions from electric vehicle subsidies under the Biden administration and currently offer no gas or diesel vehicles.
However, industry analysts suggest that sales may eventually rebound, as they did in Europe after EV subsidies expired in some EU nations a couple of years ago. But in the short term, they said it’s likely a gloomy outlook for EVs.
“Next year could be a pretty dreadful year for EVs in this country,” Adam Jonas, an auto industry analyst for Morgan Stanley, said earlier this month.
Automakers have cut production of some EVs, suspended or canceled new models and shifted toward more gasoline and hybrid automobiles.
Shifting policy prompts change
Eliminating the tax credit marks the end of an embrace of cleaner energy under former President Joe Biden and the introduction of new policies under Trump.
The Trump administration and Republicans in Congress largely oppose subsidies for EVs, and Trump has expressed skepticism toward climate change science. He has dubbed Biden’s former policies on energy the “green new scam.”
GOP lawmakers have also halted fines for vehicle manufacturers who fail to comply with fuel efficiency standards, and Trump has ramped up duties on foreign cars.
