EV tax credits are ending, but auto makers hope to extend them

The One Big Beautiful Bill Act that President Trump signed into law on July 4 is abruptly curtailing the $7,500 tax credit for new electric vehicles and $4,000 for used EVs on Tuesday, although some automobile makers are launching programs of their own to extend the tax credit.

According to Reuters, both Ford and General Motors are introducing programs to offer down payments on leased vehicles with discounts through their dealers. The companies' financing units will initiate purchase of EVs in the dealers' inventory by making down payments on the vehicles that would qualify the lenders for the tax credit. The dealers would then offer leases on the vehicles to their customers for several months, with the $7,500 factored into the lease rate. According to Reuters, both Ford and GM have already discussed the arrangement with the Internal Revenue Service. 

Under the OBBBA, an EV must be placed in service for taxpayers to claim the credit. If a vehicle is placed in service after Sept. 30, 2025, taxpayers must have acquired the vehicle on or before Sept. 30, 2025, to be eligible for the credit. The New Clean Vehicle Credit, Previously-Owned Clean Vehicle Credit, and Qualified Commercial Clean Vehicle Credit are not available for vehicles acquired after Sept. 30, 2025.

According to the IRS, taxpayers can demonstrate acquisition by entering into a binding written contract and making a payment on the vehicle on or before Sept. 30, 2025. A vehicle is placed in service when you take possession of the vehicle.

"With the EV tax credit deadline today, consumers are hurrying to buy eligible vehicles to lock in the savings, dealerships are working hard to move inventory and manage this temporary surge in demand," said Mike Mader, Baker Tilly's dealership industry practice leader. "After Sept. 30, we expect a drop in activity before the market normalizes again. For the long term, though, this isn't the end of the EV story — technology will keep improving, charging infrastructure will expand and interest in EVs will continue to grow well beyond this deadline."

Even before the deadline, however, many EV dealers have reportedly been frustrated with delays in receiving approvals and payments on the tax credits from the IRS, according to CNBC. Many of their customers receive the tax break by getting an upfront rebate at the point of sale, but some dealers are finding themselves waiting for up to $100,000 in rebates that they've provided to their customers.