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KEY TAKEAWAYS
- Consumers who are interested in buying an electric vehicle should do so this month to save thousands of dollars.
- Tax credits for electric vehicle owners will expire at the end of September. Dealers are using advertising and promotions to move their inventory out before the tax breaks are eliminated.
- Car manufacturers have absorbed some of the cost increases from tariffs so far, but analysts say they will not be able to do so for much longer. Tariffs are expected to make electric vehicles $4,000 more expensive on average.
If you’re interested in buying an electric vehicle, experts say buying this month could save you thousands of dollars.
A key tax policy change in the ‘One Big Beautiful Bill’ means a federal tax credit that made it cheaper for Americans to buy an electric vehicle will expire after this month. Additionally, a 25% tariff on automobiles and parts from most countries, as well as other duties, are set to push vehicle prices higher.
EV Sales Are Set To Jump
The tax credits give buyers $7,500 off their 2025 tax bill if they purchase a new clean vehicle and $4,000 for a used clean vehicle — until Sept. 30, 2025. Buyers will get the credit if they have entered into a written contract and made a payment, which includes a down payment or a vehicle trade-in, before the month ends.
This month, many dealers are making a “final, aggressive push to move remaining inventory,” Thomas King, president of the data and analytics division at J.D. Power, said in a press release. EV dealers are using advertising and promotions to bring more consumers in the door, said Brent Gruber, executive director of the electric vehicle practice at J.D. Power.
And it seems to be working. EVs are expected to account for 12% of all the cars bought in August — an all-time high. The boost was driven by consumers moving up their car purchases to beat the expiration of the EV tax credit, King said.
Tariffs Will Also Hike Prices
On top of the tax credits going away, King said tariffs are expected to increase the price of an average EV by $4,275. So far, car manufacturers have been able to offset many of the cost increases from tariffs, but they can’t continue to do so long-term, Gruber said.
“Ultimately, what you’ll see is prices rising on all vehicles,” Gruber said. “When it comes to electric vehicles, specifically, and you factor in the loss of that $7,500 tax credit, you could be talking about a product that is considerably more expensive a month from now than it is right now. It could be a double whammy for electric vehicles.”
Gruber said consumers who have been thinking about purchasing an EV should do so now, as the clean cars will likely never be priced this low again.
“[People who] are generally interested in them but haven’t decided whether or not to make the leap into electricification, I would encourage those folks to at the very least go visit a dealer and get an in-person experience with the electric vehicles,” Gruber said. “Take advantage of this tax credit while it is here.”
