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Time’s up.
A federal tax incentive that offered up to $7,500 off the price of EVs is officially dead thanks to President Trump’s tax and budget bill, a development that has prompted predictions of cratering demand from US auto executives.
“It’s a game-changer,” Ford CEO Jim Farley said at an event in Detroit this week. “I wouldn’t be surprised if EV sales in the US go down to 5% of our industry, from, probably, this month, 10% [or] 12%.”
Smashing records: With the clock ticking down to the Sept. 30 expiration date, Q3 saw a surge in EV demand. Cox Automotive forecast a record 410,000 sales, up 21.1% YoY and 30% over Q2. The EV boom lifted the entire new-vehicle market in Q3, according to industry analysts.
“The biggest driver of September’s strong sales pace is temporarily inflated demand for electric vehicles,” Thomas King, president of the data and analytics division at JD Power, said in a statement. The firm’s data showed EVs reaching 12.2% market share in September, up 2.6 percentage points from a year ago, translating to a 27.5% increase in EV sales.
- GM’s Q3 EV sales record of 66,501 units helped boost the automaker’s quarterly sales 8% YoY. “No one is in a stronger position for a changing US market than GM,” Duncan Aldred, GM senior VP and president of North America, said in a statement.
- Ford’s 8.2% YoY sales gain got a lift from the automaker’s record electrified vehicle sales. Ford reported new sales records for both hybrids and battery-electric vehicles, with BEVs up 30.2%.
- US EV market leader Tesla reported 7% growth in quarterly deliveries.
- Hyundai had its best-ever Q3, with sales up 13% YoY. The brand’s EV sales grew 100% while hybrids were up 48%.
- Sister brand Kia also reported a record quarterly performance, and said that its electrified vehicle sales grew 26% through September.
- American Honda’s sales fell 2% YoY in Q3, but the automaker said that “record sales of electrified models” helped it navigate “challenging market conditions.”
- Toyota reported a nearly 16% YoY sales gain and a 10.5% leap in electrified vehicle sales.
BEVs even outsold the popular hybrid segment in September, Tom Kondrat, global lead of advanced analytics for Urban Science, told Tech Brew.
Extended savings: Numerous automakers have made moves to extend EV deals past the credits’ expiration date.
GM and Ford introduced programs to effectively extend the $7,500 credit on EV leases, Reuters reported this week. And Hyundai announced Wednesday that it’s slashing prices across its 2026 Ioniq 6 lineup by up to $9,800, and maintaining $7,500 cash incentives for 2025 model year EVs.
“While the $7,500 EV credit has expired, our electrification strategy has always extended beyond incentives,” Randy Parker, president and CEO of Hyundai Motor North America, said in a statement. “We invested in EV innovation well before the [Inflation Reduction Act] and remain steadfast in our commitment to affordability, quality, and customer care.”
Tackling affordability challenges will be key to maintaining momentum in the EV market, according to Stephanie Valdez Streaty, Cox’s director of industry insights.
“With $7,500 incentives eliminated, the case for EVs now rests on performance, technology, and total cost of ownership, rather than subsidies,” she wrote.
Kondrat offered a counterpoint to the gloom, pointing to California’s EV market maintaining stable sales rates after doing away with state incentives.
“There’s too much infrastructure that’s been invested. There’s too much production capacity,” he said. “I think the market will align. Automakers will find ways to make them more affordable, ways to make them more attractive, and we will see a continued trend upward.”