US EV Sales Surge Before Sept. 30 Tax Credit Deadline

US electric vehicle (EV) sales spiked in the weeks leading up to the Sept. 30 deadline for federal tax credits, following the early termination of incentives in the Republican tax and spending package passed in July. The credits, worth up to US$7,500 for new EVs and US$4,000 for used vehicles, required buyers to have a binding purchase agreement by Sept. 30, though delivery could occur later.

“The past couple of weeks — even in the past several days — EV sales just exploded,” said Matt Jones, Senior Director of Industry Relations, TrueCar. Stephanie Valdez, Senior Analyst, Cox Automotive, added, “The current surge in EV sales is being driven by product innovation, motivated dealers, and an urgency ahead of the IRA tax credit phase-out.”

Cox Automotive forecasts that EV sales in 3Q25 (July-September) rose 21.1% compared with 3Q24 and 30% from spring 2025. J.D. Power reported that EVs accounted for over 11% of the US market in August, a level previously only seen in December 2024, when buyers rushed to secure incentives. Cars Commerce noted that used EVs under US$25,000 were the fastest-selling vehicles on the secondary market, reflecting the impact of the US$4,000 credit for pre-owned EVs.

Overall vehicle sales also benefited. Edmunds projects 3Q25 could mark the strongest third-quarter performance since before the 2020 pandemic. However, analysts warn of a short-term “EV hangover,” as post-deadline demand may slow. “All those who raced to buy an EV early? Now they won’t be buying later this year. Unsold EVs may have a harder time finding buyers,” said Ivan Drury, Analyst at Edmunds.

Automakers prepared for the rush with deals from Hyundai, Ford, and Lucid, including inventory clearance, free home chargers, and financing incentives. Analysts suggest that after September, manufacturers may rely on discounts and leases to maintain volume. Gil Tal, Director of the Electric Vehicle Research Center at UC Davis, said, “EV prices could even drop if carmakers have more 2026 production than demand.”

The long-term impact of ending federal tax credits remains uncertain. Rhodium Group estimates early termination could reduce EV sales by 16%–38% compared to projected growth. Dr. Tal warned, “Without incentives and supply-side regulations from California and the federal government, EV market share will not grow consistently, and most vehicles on the road will continue emitting high levels of greenhouse gases.”