The clock is ticking for electric vehicle (EV) buyers in the U.S. The federal EV tax credit—worth up to $7,500 for new EVs and $4,000 for used ones—is set to expire on September 30, 2025, following the passage of the One Big Beautiful Bill Act signed into law on July 4.
If you’ve been considering an EV purchase, now is the time to act.
What’s Changing?
Originally extended through 2032 under the Inflation Reduction Act, the EV tax credit has been cut short by new legislation. After September 30, 2025, no new purchases or leases will qualify for the federal credit.
However, the IRS has issued updated guidance: buyers can still qualify if they sign a binding contract and make a payment before the deadline, even if the vehicle is delivered later. This is especially helpful for buyers ordering vehicles from out-of-state or waiting on new inventory.
Who Still Qualifies?
To claim the credit before it vanishes, buyers must meet the following criteria:
1. Income limits:
- $150,000 or less for single filers
- $300,000 or less for joint filers
- Used EVs: $75,000 (single) / $150,000 (joint)
- Vehicle price caps:
- $80,000 for SUVs, trucks, and vans
- $55,000 for other new cars
- $25,000 or less for used EVs
- Manufacturing requirements:
- Final assembly in North America
- Battery components and critical minerals sourced from approved countries
Which EVs Are Still Eligible?
As of August 2025, here are some of the models that still qualify for the full $7,500 credit:
- Tesla: Model 3, Model Y, Cybertruck
- Chevrolet: Equinox EV, Blazer EV, Silverado EV
- Ford: F-150 Lightning
- Hyundai: Ioniq 5
- Honda: Prologue
- Kia: EV6, EV9
- Chrysler: Pacifica PHEV (the only plug-in hybrid still eligible)
Leasing Loophole Closing Too
Previously, leased EVs were treated as commercial purchases, allowing dealers to apply the full credit regardless of buyer income or battery sourcing. That loophole will also close after September 30.
What Happens After the Credit Ends?
Without the federal incentive, EV affordability could take a hit. Analysts predict EV adoption may stall at 8% through 2026, far below earlier expectations. Automakers and dealers are responding with aggressive promotions—some lease deals are as low as $100/month.
What You Can Do Now:
Begin your purchase process now to avoid inventory shortages.
- Get it in writing: Ensure your contract and payment are dated before September 30.
- Explore leasing: Some dealers may still offer incentives that mimic the tax credit.
- Check state incentives: Some states offer additional rebates that may still apply.
If you’re serious about going electric, September 30 could be your last chance to take advantage of significant federal savings.
