(WWJ) The clock is now ticking if you’re interested in buying an electric vehicle, and want a federal tax credit.
“You’ll want to try and complete that transaction before September 30th,” says Sam Abuelsamid, who follows the electric vehicle market for Telemetry. “After September 30th, all of the federal tax credits are gone.”
Ending EV tax credits was a promise made during President Trump’s campaign. The phase-out began when he signed what he called the “big beautiful bill” last week.
The credits were up to $7,500 on a new EV, and up to $4,000 on a used one. There were limits based on the buyers income and the cost of the vehicle.
Carmakers, for the most part, have not made money yet on electric vehicles. Ford, which is the only company to specifically break out financial data on EVs, has lost billions on its “Model E” division.
This is likely to make it even harder to make EVs profitable. Abuelsamid says it’s possible carmakers will have to put their own incentives on electric vehicles to replace some of the lost federal money.
“There will be an incentive for the manufacturers to make the best deals they can, and to try to find ways to accelerate some of their cost savings on these vehicles–to get their costs down– so they can afford to put some money on the hood, so to speak, on these EVs.”
Carmakers have already been working hard to get costs out of electric vehicles. They have also been changing EV plans. GM no longer plans to make its Orion plant an electric vehicle production center. Ford cancelled a three row electric crossover. Stellantis has had several delays on the launch of its electric Ram pickup truck.
At the same time, the EV market is becoming more competitive, and market leader Tesla is seen as vulnerable.
“More consumers than ever can now find an EV that fits their lifestyle, budget and brand preference,” says Stephanie Valdez Streaty, who tracks electric vehicles for Cox Automotive.
While there is a lot of uncertainty in terms of the cost of electric vehicles, and what sales may be like in the near future. Streaty says the market is getting more mature. That means more competition, and more choices for consumers. That’s the type of thing that can bring down overall costs, even as the federal incentives go away.
“EV’s now are available across every major vehicle segment segment,” says Streaty. “SUVs have seen the most dramatic expansion. For the first time, trucks and vans are meaningfully represented in the EV space.”