Don’t Drive Past Savings: Your Guide to the EV Tax Credit Expiring September 30, 2025

Deadline Alert:  If you've been considering buying an electric vehicle (new or used), or if you're contemplating a business fleet purchase, this is a nice but strong reminder.  The hefty federal tax credits are set to expire on September 30, 2025.  Here's why it matters and what you can do about it.

What’s Ending—and Why You Should Care

The One Big Beautiful Bill Act (OBBBA) has effectively ended the IRA-era EV tax benefits.  These credits will expire on September 30, 2025, with no phase-out, grace period, or grandfathering for later deliveries. Previously, they were expected to last until 2032.

That means:

• New EV credit: up to $7,500.
• Used EV credit: up to $4,000
• Commercial EV credits range from $7,500 to $40,000, depending on the vehicle weight.

Key Dates and What “Acquired” Really Means

To qualify, you must take ownership of the vehicle by September 30, 2025—that is the deadline, plain and simple.  A signed contract or scheduled delivery after that date will not be considered.

EV Leasing and Tax Credit

When an electric vehicle (EV) is leased, the clean vehicle tax credit is not applied directly to the consumer.  Instead, it is directed to the manufacturer or dealer providing the lease.  Most automakers pass on this benefit in the form of decreased lease rates or monthly payments.

This is why the so-called "leasing loophole" gained popularity: leasing allowed EVs to qualify for the entire $7,500 credit even if the model did not match the purchase requirements.  However, that clause expires on September 30.  New leases and purchases delivered after that date will no longer be eligible for this agreement.

What Dealers and Buyers Need to Do Now

• Act now: If you're in the market, confirm availability and delivery schedules before the deadline.
• Understand your transfer options: You can either transfer the credit to the dealer at the time of purchase and receive the discount right away, or you can claim it later on your tax return using IRS Form 8936.
• Know the eligibility rules:

New EVs must meet sourcing and assembly criteria; there are price constraints ($55K for cars, $80K for vans/SUVs/trucks); and income limits apply.

For used EVs, the vehicle must be at least two model years old, sold by a dealer, and cost less than $25K. The credit is equal to $4K or 30% of the sale price, whichever is less.

Commercial EVs: For business use, up to $40,000 depending on weight; no income restrictions.

Big Picture: Market Impact & Strategic Timing

According to analysts, EV purchases will certainly increase this summer as purchasers rush to meet the deadline, followed by a potential dip in sales in October.  A Harvard research predicts a 6% decrease in EV market share by 2030, but the legislation saves the government $169 billion over a decade.  (Reuters)

 Nonetheless, with the deadline rapidly approaching, intelligent purchasers can still save significantly—but timing is important.

Summary at a Glance

Takeaway: Don’t Wait (Too Long)

If an EV is on your wish list, now is the time to act—firm orders, confirm delivery dates, and verify credit eligibility.

Alternatively, see your tax consultant to check that everything is in order.  Those tax credits will not wait.