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Federal electric vehicle incentives end this week
If you're in the market for an electric vehicle, you have two days left before federal incentives end. After that, analysts say there could be a slump in the EV car market.
HOUSTON - If you're in the market for an electric vehicle, you have two days left before federal incentives end. After that, analysts say there could be a slump in the EV car market.
Car buyers have been rushing to cash in on the federal EV tax credit this summer before it expires September 30.
The backstory:
The credit is $7,500 for a new electric vehicle, and $4,000 for used. It was introduced in 2022 under President Biden's Inflation Reduction Act, but is being phased out by President Trump's One Big Beautiful Bill Act.
EV sales reached a record high in August, with new EV sales up nearly 18% over the previous year and used EV sales up 59%, according to Cox Automotive.
Impact on EV sales
Big picture view:
Stephanie Weber, an economics professor at the University of Colorado Boulder, warns that EV sales could drop when the federal subsidies end.
"It might be sort of a flattening out of growth. Over the long term, I think we're just going to see fewer product introductions. Some automakers have already actually canceled EV's that they had previously announced," explained Weber in an interview with FOX News.
According to a joint study in November by professors at several universities, including Duke and Stanford, EV registrations could decline by 27% without the incentive.
Other credits expiring
What's next:
Other home energy credits are also expiring by December 31, 2025, including:
- up to $2000 for a heat pump for an A/C unit, heater, or water heater,
- up to $1200 for weatherization or insulation,
- up to $600 for an electrical panel,
- and up to 30% of qualifying costs for rooftop solar, battery storage, or geothermal heating.