Wow, it’s a real frenzy out there as folks scramble to snag electric cars before a big deadline hits. See, these tax credits up to $7,500 are about to vanish, thanks to a law signed by Trump back in July—those credits are only hanging around till the end of September. Initially, Biden’s Inflation Reduction Act had these incentives sticking around till 2032, but no more.
Analysts are predicting a record surge in EV sales this quarter, driven by this disappearing incentive. Stephanie Valdez Streaty from Cox Automotive chimed in, noting the rush to buy is palpable. Just last July, around 130,100 new EVs flew off the lots, marking the second-highest monthly sales after December’s peak, jumping a hefty 26.4% compared to June and nearly 20% year-over-year. EVs also grabbed a 9.1% share of all passenger vehicle sales that month, breaking records.
As for used EVs, almost 36,700 found new homes in July—a fresh record—and some models like the Chevy Equinox EV, Honda Prologue, and Hyundai IONIQ 5 are smashing sales records, too. 8,500 Equinox EVs alone shifted, the biggest non-Tesla EV haul in the U.S. Tesla’s numbers have dipped lately, though, sliding about 12% in Q2 and 9% in Q1.
Those tax breaks are a big carrot for buyers, aiming to make EVs financially tempting. The credits are a piece of the puzzle in cutting greenhouse emissions, especially since the transportation sector is a big emitter. Now, although EVs go easier on the wallet long-term compared to traditional gas guzzlers, they still come with a steeper initial price tag. In July, the average price for new EVs was $55,689, but with the full credit, they’d dip close to parity with gas cars at $48,189.
Tom Libby from S&P Global pointed out that the cost difference between EVs and gasoline cars has basically evaporated. Without those federal credits, EVs might struggle to stay competitive on price. Still, some states and utilities might chip in with additional perks, depending on where you’re living.
Car dealers are jumping on the bandwagon, pushing to boost sales before the Sept. 30 deadline. Tesla’s website was shouting about the credit ending soon, urging folks to act now. That date’s the cutoff for actually driving the car off the lot to claim the tax benefit.
On top of all this, dealers are throwing in extra incentives. In July, they offered about $9,800 in additional perks to new EV buyers, accounting for roughly 17.5% of the average purchase price. That’s the highest since 2017, before this new wave of EV excitement hit.
While the fourth quarter of 2025 might see sales take a hit when tax credits phase out, the used EV market seems poised for growth. With more options rolling out and fewer new EV incentives, used EVs might just become the hot ticket. Cox Automotive notes that just a third of used EVs qualified for credits anyway, so as new EV benefits dwindle, the pre-owned segment might just accelerate even faster.
