Are you thinking about buying an EV? Most are set to cost $7,500 per night in October
Americans considering buying a new electric vehicle should work faster if they want to save $7,500 on the cost of a car.
Later today, the president is expected to sign a package of tax cuts and spending plans known as the Big Beautiful Building. The debt cap will be raised by $5 trillion, but the Trump administration decided in October that his uncle Sam could not afford to subsidize the purchase of the EV.
This could soon bring you to the last minute EV buyer stampedes over the next three months. This could potentially lead to an original equipment manufacturer or car manufacturer known as OEMs in the industry starting to slow down assembly line speeds so that subsidies don’t get trapped in excess inventory once they expire. Even before September ends, empty dealer lots could still result.
“I think OEMs may decide to start as early as the Q325 to reduce US EV production to reduce US EV production in order to mitigate financial impacts and potential inventory issues,” UBS analysts wrote Friday.
The federal tax credits will be at the end of September rather than the initially planned end of the year.
Importantly, the lease credits will also be terminated. EV lease transactions have been extremely popular since it came with $7,500 no strings attached That limited consumer EV options include the extent to which the vehicle and its battery pack were manufactured in the US.
The $4,000 purchase credit for second-hand EVs will also be gone in September.
Affordable price gaps and Biden’s plan to close combustion engine cars
Federal government EV tax credits have been introduced in Starting in 2023 As part of the Inflation Reduction Act, President Biden’s stimulus program was named as it passed when the soaring cost of livelihoods turned stimulus into a bad term.
Previous managers wanted to reduce the price gap between internal combustion engines and EVs. This often approached $10,000 due to expensive metals such as lithium and nickel used in EV battery packs.
The tax credits helped to spark interest, but did not address the issue of affordability completely. EV buyers could only request it on their annual tax returns. This means that you needed cash on hand to pay the full first. Musk pointed this out in October of that year.
“It’s worth noting that many of these incentives, such as tax credits, are actually extremely difficult for the average person to access, as most people don’t burn $10,000 or $7,500 in their bank account. “They can’t put $7,500 in the forefront of 18 months or six months to get a tax credit.”
Manufacturers may offer high rebates on the cushioned portion of the impact
However, in January 2024, tax credits changed when applied directly at the point of sale, immediately reducing costs and eliminating the hassle of consumers.
It is unclear at this point how manufacturers will adjust EV prices to a new reality. Some choose to offer some of the rebates to mitigate the blow. Many brands adopted this approach in Germany when the government had to eliminate the “environmental bonus” EV purchase subsidies as part of an emergency revision of the budget.
But Trump’s bill was also at the same time Fines will be abolished To exceed the average fleet economy (CAFE) rules for companies. This means that legacy automakers will have even fewer incentives to push EVs.
The result could be a renaissance of internal combustion engines that places the US in a very different path from the world where EV adoption is ever growing.
“In the long term, we believe OEMs will focus on the ice model in the US market amidst relaxed emissions rules and lack of EV incentives,” UBS added.