Electric Vehicle Tax Credit Ends on September 30
Last updated July 18, 2025
When President Trump signed his big budget bill into law on July 4, it eliminated the electric vehicle (EV) tax credits enacted under the Biden Administration—$7,500 for buying or leasing a new qualifying EV and $4,000 for buying a used one.
Before Trump killed the tax break, it was scheduled to remain in effect through 2032. You can still get the credit but you’ll have to act fast—it now expires on September 30. And not all buyers and EVs qualify.
So, is now the time to buy?
Which Taxpayers and Vehicles Qualify for the Credit?
The Clean Vehicle Credit is limited to certain buyers and specific new and leased models.
You can claim the tax credit if your adjusted gross income (AGI) does not exceed $300,000 for married couples filing jointly, $225,000 for heads of households, and $150,000 for all other filers.
Twenty vehicle models qualify for the credit, including Teslas and the popular Ford F-150 Lightning. For some models, only certain trim levels qualify. Consumer Reports has a list of the new and used EVs that currently qualify. The credit is available for vehicles meeting these requirements:
- MSRP of less than $80,000 for pickups and SUVs, and less than $55,000 for all other vehicles
- Final assembly took place in North America
- At least 50 percent of the battery’s minerals and components are from the U.S. or a country with a free trade agreement with the U.S.
- Gross weight rating of less than 14,000 pounds
- Battery capacity of at least 7 kilowatt hours
If the vehicle meets only one of the battery sourcing requirements, it may still qualify for a $3,500 tax credit.
The used-vehicle EV credit is available for 142 pre-owned cars and trucks. The vehicle must be purchased from a dealer, have a sale price of $25,000 or less, and be at least two years old.
For used EV purchases, buyers must have adjusted gross incomes of $75,000 for single filers, $112,500 for heads of households, and $150,000 for married couples filing jointly.
The U.S. Department of Energy has detailed information about the Clean Vehicle Credit on its FuelEconomy.gov website.
Buy Now or Wait?
If you’ve already decided that you want an EV—and you qualify for the tax credit—it might make sense to buy before September 30. There are many great electric vehicles, sedans, SUVs, and trucks on the list.
But if you’re on the fence, don’t let the deadline rush into a purchase you may regret.
“The last thing you want to do is rush and buy something you’re not prepared for,” said Chris Harto, senior policy analyst for transportation and energy at Consumer Reports. “EVs are great, but [they] require a shift in mindset about how you operate them and where you’re going to charge them. And if you’re not ready for that, it can be a bit of a barrier.”
By waiting, you might even get a better deal. Industry analysts predict automakers will find ways to reduce EV sticker prices.
Joseph Yoon, consumer insights analyst at Edmunds, said automakers can “eat the cost… “or find a way to incentivize dealers to sell them at a massive discount.” Yoon said he’s more concerned about the impact of Trump’s tariffs, which could drive up the price of some EVs by 25 percent or more.
“Incentives and rebates are powerful and flexible strategies to adjust the price,” said Tom Voelk, automotive journalist and publisher of Driven Car Reviews. “They can make buyers feel like they’re getting a great deal. Who doesn’t love something like $8,000 off the price of a $60,000 vehicle? And incentives work better for wealthy buyers who didn’t qualify for the federal tax credit.”
And consider this: While EVs may have a higher initial purchase price, they’re less expensive to operate and maintain than gas-powered vehicles. Over time, those savings can offset the upfront cost.
Matthew Phillips, CEO of Car Pros Automotive Group in Washington state, said dealers will get as competitive as they can, knowing that demand will drop after September.
“Manufacturers won’t give up on EVs, and some are already offering big rebates,” Phillips told Checkbook.
In June, the average EV incentives “reached an all-time high,” according to Cox Automotive, 14.8% of the average transaction price, or nearly $8,500.
Consumer Reports found July incentives as high as 26 percent for the Nissan Leaf, Nissan Ariya, and Volkswagen ID4. The Kia Niro Electric has a 21 percent incentive, while the Hyundai Ioniq 5 and 6 are offered at 16 percent off.
This month, most major manufacturers are also offering zero percent financing on one or more of their electric models, including the Chevrolet Equinox EV, Ford F-150 Lightning, GMC Sierra EV, Honda Prologue, Kia EV6, Lexus RZ, Nissan Leaf, Toyota bZ4X, Volkswagen ID.4, and Tesla Model 3.
Note: If you choose to go electric, check with your state and local governments to see if they offer credits or incentives for buying the vehicle or installing a home charger.
This Will Not Kill the EV Market
The demand for EVs is expected to drop after the tax credits expire. At an auto industry event in December 2024, GM CEO Mary Barra acknowledged that the $7,500 tax credit “is driving demand” and “without that, that’ll slow.” Reuters reported.
In the short term, fewer electric vehicles may be produced, and some slow-selling models could be discontinued. But manufacturers have invested billions in EV technology and recognize that the industry’s long-term future lies in electric vehicles. EV sales are projected to reach 25 percent of the global market this year, according to the International Energy Agency’s Global EV Outlook 2025.
In its July report, Cox Automotive noted that it still believes new EV sales will continue to expand in the U.S. “but the growth trajectory has been curbed,” with volume expected to remain flat year-over-year. Cox said expectations for sales of new EVs in the U.S. for 2025 have been lowered from approximately 10 percent of total vehicle sales to an 8.5 percent share.
The road ahead may be bumpy, but Consumer Reports is optimistic about the future of EVs.
“The price to build these vehicles is only coming down over time,” said CR’s Harto. “So, in the short term, we might see some pullback, but I think we’ll continue to see better, cheaper electric vehicles coming onto the market over the next four or five years. And that’s really what’s going to drive the market: vehicles that meet consumers where they need to be with a better product at a lower price.”
More from Checkbook:
- Consumerpedia episode 83: Tips for Buying a New, Used, or Electric Car
- How to Get the Best Price on a New Car
More Info:
- Consumer Reports: Electric Cars and Plug-In Hybrids That Qualify for Federal Tax Credits (For Now)
- Consumer Reports: Hot, New Electric Cars That Are Coming Soon
- Edmunds: EV Buying Guide
- Bankrate.com: Electric Car Facts
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.