Federal Tax Incentive for Electric Vehicles to Expire This Fall
The federal tax incentive for electric vehicles in the U.S. will be canceled this fall. This means that buyers will no longer be able to receive a compensation of up to $7,500. The changes will come into effect on September 30, 2025, although the incentive was initially supposed to last until the end of 2032.
Experts believe that the cancellation of the incentive could significantly impact the demand for electric vehicles. Without financial support from the government, their price will increase, making them less attractive to buyers. For example, the Chevrolet Equinox EV currently costs $33,600, but with the incentive and other bonuses, its price drops to $24,100. After the incentive is canceled, the cost may return to its initial level.
This could affect the popularity of the model, which in the second quarter of 2025 became the best-selling electric vehicle for General Motors with a figure of 17,420 units.
Some manufacturers have already faced similar problems when certain models lost eligibility for the incentive due to changes in production. In response, companies reduced prices or moved production to the U.S., but now these decisions may prove futile.
The question remains open: will the cancellation of the incentive affect your choice of car? For many buyers, this compensation was a significant argument in favor of electric vehicles, especially against the backdrop of rising prices for traditional cars. At the same time, even without the incentive, some models remain competitive in price, such as the Chevrolet Equinox EV compared to gasoline-powered crossovers. However, the overall sales dynamics may change, and manufacturers will have to find new ways to attract customers.