Rush to buy electric vehicles as key tax credits expire

In the United States, particularly in California, there has been a significant push towards purchasing electric vehicles (EVs) recently. This surge in sales can be attributed to the upcoming expiration of the federal electric vehicle tax credit, which was set to end on September 30, 2025. Kathy Horan, a long-time resident of North Bay, California, made the decision to trade in her hybrid vehicle for a fully electric one just before the deadline. Her motivation stemmed from the desire to take advantage of the federal incentive that provides substantial savings for buyers of new and used EVs. The federal EV tax credit was implemented as part of President Biden's Inflation Reduction Act in 2022. It offered up to $7,500 off the cost of a new electric vehicle and $4,000 off a used one. However, this credit is ending due to legislation enacted during the Trump administration. As businesses prepare for this change, car dealerships have reported a noticeable increase in inquiries and sales, with many customers rushing to finalize their purchases before the credit goes away. Sales data reflects this trend, with electric vehicle sales hitting a record high in August 2025, showing a more than 17% increase compared to the previous year. Conversely, gas-powered vehicle sales have been declining, as potential buyers face economic uncertainties and rising car prices. Joshua Allrich, the owner of a car dealership in Atlanta, noted that the business has slowed down, suggesting that customers are being drawn to the high incentives associated with electric vehicles. California Governor Gavin Newsom has stated that while the state supports electric vehicles, it will not introduce a rebate program to replace the federal credits starting in October. This indicates that the market for EVs could be significantly affected, as buyers will no longer have the same financial incentives. Economists, however, suggest that while there will be an impact, it may not be severe. They predict that as dealerships continue making investments in infrastructure, it might moderate the overall decline in EV sales.