Electric vehicles (EVs) have been gaining popularity in the U.S. over the past few years, thanks to tax credits that made them more affordable. But now, in 2025, some major changes are happening that every potential EV buyer should know. Let’s break it down in simple terms.
Big Deadline Alert: September 30, 2025
If you’re planning to buy an electric vehicle, time is running out. The federal EV tax credits in the U.S. are ending sooner than originally planned.
Right now, you can still get up to $7,500 off when you buy a new electric car, and up to $4,000 back on a qualifying used one — but only if the purchase and delivery happen before September 30, 2025.
After that date, these benefits will be gone for good. No delays, no second chances. So, if you’ve been thinking about going electric, this could be your final opportunity to take advantage of major savings.
Why Are the Tax Credits Ending?
Originally, these EV tax credits were set to last until 2032. They were part of a bigger effort to support clean energy and reduce pollution. But in mid-2025, a new law was passed that cuts these benefits short. The government is shifting focus and ending many green energy incentives, including EV credits.
How Do These Credits Work (Before They Vanish)?
Here’s how you can still benefit:
For New EV Buyers:
- You could get a total of $7,500, split into two parts:
- You can get $3,750 if a specific portion of the battery materials is sourced from the United States or countries that have free trade agreements with the U.S.
- $3,750 more if the car is assembled in North America and key components are sourced from approved areas.
However, not every car qualifies. The vehicle needs to meet specific manufacturing and sourcing rules.
For Used EV Buyers:
Used electric vehicles may be eligible for a tax credit of up to $4,000, or 30% of the sale price—whichever amount is lower. However, certain requirements must be met to qualify:
- It must be bought from a licensed dealer.
- It must cost $25,000 or less.
- You must meet certain income limits.
Bonus: Instant Savings at the Dealership
The good news? Starting recently, you don’t have to wait for tax season to enjoy these savings. You can now transfer your tax credit directly to the dealership and get the discount right away when you buy the car.
What Happens After September 30, 2025?
Once the deadline passes, federal tax credits for EVs will no longer exist. That’s right—no more up to $7,500 back for new cars or $4,000 for used ones.
However, some states may still offer their own rebates or incentives. These can include:
- Purchase rebates
- Lower vehicle registration fees
- Free access to carpool lanes
- Charging station grants
So, even if the federal program ends, it’s still worth checking what’s available in your state.
Leasing? That’s Changing Too
In the past, some people used a special leasing “loophole” to get the full $7,500 credit—even if the car didn’t fully meet eligibility rules. But that loophole is also closing on September 30, 2025.
So whether you’re buying or leasing, the clock is ticking.
Industry Impact: What Are Automakers Saying?
The auto industry is already reacting to these changes. Some car companies have said they expect higher prices and slower sales once the credits end.
Experts predict that EV sales in the U.S. could drop by nearly 25-30% without these incentives. That’s a big deal for automakers who’ve invested billions into electric technology.
To adjust, some manufacturers are starting to shift focus back to traditional vehicles or are changing their EV rollout strategies.
What Should You Do Now?
Here’s a simple checklist if you’re interested in an EV:
- Check if your favorite EV qualifies for the credit—especially the sourcing and manufacturing rules.
- Look into state and local incentives—some may still be available after the federal program ends.
- Talk to dealers about the “point-of-sale” credit, so you get the savings right away.
- Consider used EVs if you’re on a tighter budget—there are still good deals under $25K with credit options.
