Thinking of buying an EV? Your tax credit window is closing

Congress has approved a bill that will end the federal tax credit for buying or leasing electric vehicles (EVs) effective September 30. The bill, which President Trump has called the "big, beautiful bill," will give tax breaks to corporations and cut spending on Medicaid by $1.2 trillion. Since 2008, purchasing an EV has come with a $7,500 federal tax credit, which was expanded in 2022 to include up to $4,000 on used EVs. Despite the benefits of EVs, the incentive will soon be eliminated, making it easier for automakers to build gas-powered vehicles. The Electrification Coalition, an EV advocacy group, warns that the bill will have negative impacts on the American EV market, giving other markets like China a competitive advantage. Experts predict escalated sales leading up to the September 30 deadline, but a steep downturn in sales afterwards. The elimination of the incentive is expected to save the US government $129 billion in the next 10 years, but will reduce EV market penetration by 6% over the next five years, leading to dirtier air and greater greenhouse gas emissions. The bill's passage is seen as a setback for the US EV industry, which is already lagging behind other markets. Without a competitive US EV industry, the country will remain dependent on volatile oil markets and reliant on China for critical minerals. The elimination of the tax credit is a significant blow to the growth of the EV market in the US.