US Automakers Push EV Promotions as Tax Credits Approach Expiration

According to foreign media reports, as the federal electric vehicle tax credit policy in the United States is set to end, automakers are ramping up promotional efforts for electric vehicles, urging consumers to take advantage of the last chance for subsidies. Tesla's website has prominently displayed a notice: "Federal tax credits are about to expire; please complete your vehicle pickup by September 30, 2025." On the same day, Ford extended its offer of free home chargers and installation services until the end of September to attract electric vehicle buyers. Recently, Congress passed a comprehensive tax and budget bill, announcing that the $7,500 tax credit for purchasing or leasing new electric vehicles, as well as the $4,000 tax credit for used electric vehicles, will be eliminated by the end of September. These subsidies have driven the growth of electric vehicle sales in the U.S. in recent years. Some dealers and analysts expect consumers to rush to take advantage of these incentives before they expire. Rivian’s CFO Claire McDonough stated in a recent interview, "Now is undoubtedly a good time to consider purchasing an electric vehicle. Once the tax credit policy ends, Rivian may introduce additional incentives, including financing offers, depending on the industry's response." Since 2020, electric vehicle sales in the U.S. have surged, although market demand has recently softened. Automotive industry executives and analysts warn that once the subsidies are removed, electric vehicle sales may decline further. General Motors CEO Mary Barra previously stated, "The $7,500 tax credit is driving demand; without this policy, demand will slow down." Another study indicated that without this tax credit, registrations for electric vehicles in the U.S. could drop by 27%. In other countries, similar policy changes have affected the adoption of electric vehicles. After Germany announced the cancellation of electric vehicle subsidies at the end of 2023, sales of electric vehicles significantly declined. Analysts at Barclays stated in a report: "We expect a surge in electric vehicle pre-orders in the third quarter, followed by a substantial drop in U.S. electric vehicle sales in the following months." Dmitry Agapitov, a sales manager at a dealership in California, noted that during past deadlines, including this spring, his dealership experienced a significant increase in sales as buyers rushed to purchase vehicles to avoid price hikes related to tariffs. He anticipates a similar sales spike this time around. Industry surveys indicate that insufficient charging infrastructure and high vehicle prices continue to hinder the widespread adoption of electric vehicles. The latest data from Cox Automotive shows that the average price of new electric vehicles in the U.S. reached $58,000 in May, nearly $10,000 above the industry average. The anticipated surge in electric vehicle purchases may boost the market. In the past, automakers have compensated for reduced tax credits by increasing consumer incentives. In January 2024, sales of the Ford Mustang Mach-E fell after the loss of a $3,750 tax credit, prompting Ford to lower the model's price. General Motors offered a $7,500 purchase discount for models that lost subsidies.