If you’re really still thinking about buying a new EV, you need to drop what you’re doing right now.
Although it’s been creeping up for a little while, you know how it goes: Some folks are still in the market for an EV, but haven’t yet pulled the trigger before the $7,500 federal tax credit expires on September 30. Well, it’s September 29, so if you really are still on the fence, here’s a piece of advice. Stop what you’re doing, and take advantage for the literal hours you have left to do so.
For everyone else, this point is more a period of reflection than anything else. After President Donald Trump signed the One Big Beautiful Bill Act into law, he set a ticking clock for the US government’s — and taxpayers’ — subsidy of new, American-built electric cars and trucks. But how much did Americans actually take advantage of the federal tax credit? Thanks to a new analysis over at LendingTree, we have a better idea.
In tax year 2023 alone, the last year in this particular study, some 487,990 American EV shoppers saved a combined $3.3 billion. No surprises as to which EVs rounded out the top three choices among those buyers (Tesla Model Y, Tesla Model 3 and Chevrolet Equinox EV) or which states filed the most claims (California, Texas and Florida — the three most populous states).
California, in tax year 2023, filmed 157,360 claims for the new EV tax credit. That is by far and away the highest total, representing nearly one-third (32.2%) of all claims that year across the US. Texas, even being in second place, saw 38,870 claims (or 8% of the total by comparison). Florida came in close to Texas with 30,090 claims (6.2%). Altogether, the buyers in those top three states claimed a total $1.5 billion in federal EV tax credits that year. The average amount of new-vehicle credit was $6,709 of the maximum $7,500, as not all buyers had the sort of tax liability necessary to actually claim that upper limit.
Ostensibly, the tax credits were supposed to help interested buyers cope with the higher up-front costs compared to an equivalent internal combustion vehicle. With the federal incentive disappearing, high-priced EVs are going to be a tougher sell, especially as all new vehicles continue to get more expensive with each passing year. Whether you’re shopping for either type of vehicle, though, the calculus of ownership boils down to up-front costs versus what you’ll spend over the time you plan to keep the vehicle. So, with the elimination of the $7,500 federal credit, EV buyers would have to hang onto their vehicles longer to justify the higher purchase price from the outset.
At this point, it’s unclear exactly how losing the tax credit will impact the new EV market. By extension, any changes in the fortunes of the new car market could also affect the used market, so values could be all over the place as we all adjust to the new reality. While the federal tax credit will be gone after tomorrow, September 30, some states may still keep their credits in place, too, so you may still be able to save some money…just not as much as you’ve been able to these past few years.
