EV Tax Credit Ends September 2025: Should You Still Buy an Electric Car?
- LeeAnn Shattuck
- Aug 26
- 4 min read
If you believed the headlines two years ago, we’d all be silently gliding around in Teslas by now, sipping lattes and congratulating ourselves for saving the planet. Reality check: sales are slowing, automakers are hedging their bets, and the $7,500 federal EV tax credit just got taken out back and shot.
Yes, the EV credit is ending, courtesy of the new tax overhaul known as the “One Big Beautiful Bill” (insert eyeroll), signed into law on July 4, 2025. Your window for snagging that sweet government cash closes on September 30, 2025. After that? Poof. Gone. Like your neighbor’s EV range when the temperature drops below 40.
The State of the EV Market
Two years ago, EVs were the hot new toy. Dealers were slapping “market adjustments” on them like they were Cabbage Patch Kids in the 80s. Fast forward to today and… not so much.
Resale values? Brutal. Some EVs are losing half their value in just three years. That’s worse than American luxury sedans, and those are already depreciation champions. Trade in your early Mustang Mach-E or Hyundai Ioniq 5, and you might want to keep a box of tissues handy. Trying to trade in a Tesla? Yeah, good luck with that.
Dealers are sitting on unsold inventory, which means incentives are finally back. Discounts, rebates, and low-interest financing—things we haven’t seen in a while—are popping up, especially for EVs. Automakers like Ford and Volkswagen are even slowing production because the cars are stacking up like unsold fruitcakes in January.
Consumers are still nervous, and rightfully so. Charging stations are patchy, batteries cost a fortune to replace, and nobody wants to spend $50,000 on a car that feels outdated in two years. The hype has worn off, and reality has pulled up a chair.
The Tax Credit Wild Ride: Ending September 30, 2025
Here’s the deal: the $7,500 federal tax credit for new EVs dies on September 30, 2025. The OBBB killed it faster than you can say “clean energy transition.”
A few highlights of the chaos:
The full $7,500 credit was only available if the car was built in North America, used battery materials from the right countries, and stayed under strict price caps ($55k cars, $80k SUVs/trucks). Oh, and your household income couldn’t be too high. Basically, the IRS wanted you to solve a Rubik’s Cube before handing you a dime.
With the new law, buyers must sign a contract and put down a deposit before October 1, 2025. Delivery can come later, but if you don’t lock it in, the credit vanishes.
Used EVs had their own credit—30% of the sale price up to $4,000—but that’s also toast after September.
And the “leasing loophole”? That nifty trick where you could lease any EV, even ones built with batteries from China, and the credit magically applied as a rebate? Gone. Dead. Buried.
So, if you’re counting on Uncle Sam to make your EV affordable, you’d better hurry. After September, the only thing helping you will be manufacturer incentives and dealer desperation.
Automakers Changing Gears
Remember when automakers promised we’d all be driving nothing but EVs by 2035? Yeah… about that.
Ford has walked back its ambitious EV goals. GM is delaying launches left and right. Tesla keeps cutting prices like a discount mattress store just to move metal.
Meanwhile, Toyota is smirking in the corner. While the rest of the industry was diving headfirst into EV hype, Toyota doubled down on hybrids. They bet that people wanted cars that actually fit their lives and didn’t rely on a non-existent charging network. Turns out, they were right. Hybrids are flying off dealer lots faster than you can say “Prius.”
Expect more automakers to follow suit. Hybrids and plug-in hybrids are making a major comeback, while EV development shifts toward trucks, SUVs, and luxury cars where margins are fat enough to cover the risks. The all-EV future isn’t dead—it’s just been shoved into the slow lane.
Should You Buy an EV Now?
Here’s the million-dollar (or at least $50,000) question: should you buy an EV right now?
It depends on your life, your driving habits, and your tolerance for inconvenience.
It might be worth it if:
You qualify for the credit and can sign before October 1, 2025.
You mostly drive local miles and can plug in at home every night.
You find a killer dealer incentive or lease deal that makes the math work.
It’s probably not worth it if:
Road trips are your love language and the idea of hunting chargers makes you twitch.
You live in an apartment, condo or somewhere without reliable charging access.
You’re secretly hoping the technology will settle down in a few years. (Spoiler: it will, but the tax credit won’t wait around for you.)
EVs can be great cars. But they’re not for everyone, and right now, they come with strings attached. Know whether you’re buying the right tool for your life—or just a very expensive virtue signal.
The Hybrid Middle Ground
If you’re not sold on going full electric, hybrids and plug-in hybrids are the Goldilocks option.
Hybrids are easy—no plug, great fuel economy, and no range anxiety. Plug-in hybrids give you 20–40 miles of pure electric driving for errands and school runs, but you’ve got gas backup for road trips.
And here’s the kicker: automakers are betting big on hybrids again. That means more choices, better deals, and cars that actually make sense for most Americans.
Bottom Line
Don’t buy an EV because your smug neighbor with solar panels made you feel guilty. Don’t buy one because a politician said you should - or shouldn't. And don’t buy one just because you think you’re saving a fortune at the pump. (Have you priced a home charger lately?)
Buy an EV if it actually works for how you drive, where you live, and what you can afford. If not, hybrids are having their moment, and good old-fashioned gas cars aren’t going anywhere soon.
But if you want that $7,500 carrot from Uncle Sam, you’ve got one last shot. After September 30, the only thing you’ll be plugging into is your wallet.
Confused about whether an EV, hybrid, or something else is right for you? That’s what I do. Schedule a Car Chat, and I’ll help you cut through the bullshittery and find the right car for your life—not just the one making headlines this week.