Most EVs will become more expensive in the US after October, so if you’re thinking about getting one, it might be a good time to do so.
For now, American motorists making the switch from gas-powered vehicles to EV can look forward to a $7,500 federal tax credit on new US-made electric cars.
Alongside that, up to $4,000 was available for used EVs.
However, a newly passed federal bill has ended tax incentives for electric vehicles from October.
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EVs will become more expensive when tax incentives are dropped
Electric vehicles tend to cost more than their gas-powered counterparts, although they usually work out cheaper in the long run.
In an attempt to offset some of the initial price increase, the United States introduced an attractive tax credit of $7,500 for eligible vehicles.
Some EV owners even managed to boost this further and make even bigger savings.
However, a new bill that was passed by Congress on Thursday (July 3) has scrapped all federal tax credits for electric vehicles.
The tax incentives will end on September 30, meaning if you’ve been eyeing up an electric vehicle, then now might be the time to act before they become more expensive.
Senior Policy Director Ingrid Malmgren of the nonprofit advocacy group Plug In America told AP that without the incentives, EVs could become unaffordable to lower and middle-income US motorists.
“That’s really disappointing because… they’re just a really great way to reduce transportation energy cost burden,” she told the outlet.
However, she did stress that while the initial cost of EVs will become more expensive, electric car owners will pay less in fuel and maintenance costs over the lifetime of the vehicle.
Following the introduction of the bill – dubbed the Big Beautiful Bill by President Donald Trump – Jeff Bezos-backed EV startup Slate Autos removed the ‘under $20,000’ expected price tag for its upcoming electric pickup.
The company’s website said the EV was set to cost ‘under $20,000’ but that has since been removed and the FAQ page states the truck is ‘expected to be priced in the mid-twenties’.
What will this mean for EVs in the US?
While none of us can predict the future, it’s thought there might be a bit of a surge in EV sales as motorists hope to make the most of tax credits while they’re on offer.
However, when EVs become more expensive for customers, we may see a slump from carmakers, known as Original Equipment Manufacturers or OEMS, when it comes to EV production in the US.
“To mitigate the financial impact and potential inventory problems, we think OEMs may decide to reduce EV production in the US starting as early as Q325,” UBS analysts told Fortune.
“Longer term, we think OEMs will focus on ICE models in the US market amid the relaxation of emissions rules and lack of EV incentives,” they added.
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