US EV Sales Surge as Federal Tax Credit Deadline Approaches

Electric vehicle sales in the United States are experiencing a significant surge as consumers race to take advantage of federal tax credits worth up to $7,500 before they expire on September 30, according to a CNBC report citing auto industry analysts.

The tax breaks, which apply to new, used and leased EVs, are being eliminated under legislation signed by President Donald Trump in July. The original Biden-era Inflation Reduction Act had extended these incentives through 2032.

According to Cox Automotive data cited by CNBC, consumers purchased nearly 130,100 new EVs in July, marking the second-highest monthly sales total on record. This represents a 26.4% increase from June and nearly 20% year-over-year growth.

"We're expecting Q3 may be [a] record for EV sales because of the tax incentives going away," Stephanie Valdez Streaty, a senior analyst at Cox Automotive, told CNBC. "People are rushing out" to buy, she said.

EV sales in July accounted for about 9.1% of total passenger vehicle sales in the US that month, the largest monthly share on record, according to the report. Used EV sales also hit a record high of nearly 36,700 units in July.

The $7,500 tax credit for new EVs and $4,000 for used EVs helps bridge the price gap between electric and gasoline vehicles. CNBC reported that the average transaction price for new EVs in the US was $55,689 before incentives, compared to $48,078 for traditional vehicles. With the full tax credit, EVs reach near price parity at around $48,189.

Tom Libby, an analyst at S&P Global, noted that the price gap between EV and gasoline cars "no longer exists," but the disappearance of federal tax credits "jeopardizes" price competitiveness.

Dealers are capitalizing on the deadline urgency, with Tesla prominently displaying "$7,500 Federal Tax Credit Ending" on its homepage. The report noted that dealers provided about $9,800 in additional financial incentives to new EV buyers in July, representing 17.5% of the average transaction price.

Analysts expect US EV sales to "collapse" in the fourth quarter of 2025 once the tax credit expires, according to CNBC. However, the used EV market may see continued growth, as most buyers currently don't qualify for the $4,000 tax break anyway.

The September 30 deadline requires consumers to take ownership of their vehicles by that date to qualify for the tax credits.