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$7,500 EV Tax Credit Ends as Automakers Unleash Discounts, Rebates and Lease Workarounds

Buyers rushed to close deals before the cutoff, creating a risk of a near‑term slowdown as companies scramble to keep monthly costs in check.

Overview

  • The federal incentive for new electric vehicles expired on Oct. 1 after Congress ended the program years ahead of its original 2032 timeline.
  • U.S. EV sales topped roughly 1 million through September with a record 438,000-plus sold in Q3, as Tesla deliveries rose 7% year over year and GM reported 144,668 EVs through the first nine months.
  • Automakers are offsetting the loss with aggressive offers, including Hyundai’s plan to cut 2026 Ioniq 5 MSRPs by up to $10,000 and a $7,500 cash incentive on 2025 models, alongside sizable rebates and low-rate financing across multiple brands.
  • Ford and GM have devised lease and captive-finance programs following IRS consultations to pass through tax benefits on leases, while Tesla adjusted lease pricing after the credit’s expiration.
  • Analysts warn of a short-term dip in new-EV demand even as used-EV prices fall toward parity with gasoline cars, lease returns expand supply, and state and local incentives continue to help buyers in many markets.