Consumers are rushing to buy electric vehicles before the $7,500 tax credit ends on September 30, analysts say.
Record EV Sales Expected
Auto analysts report a surge in electric vehicle purchases as the deadline to claim tax credits approaches. The tax incentives, initially set to last until 2032 under the Biden administration, have been cut short by legislation signed by President Trump in July. Stephanie Valdez Streaty from Cox Automotive anticipates a record-breaking third quarter for EV sales due to this change.
Significant Increase in EV Purchases
In July, nearly 130,100 new EVs were sold, marking the second-highest monthly sales on record. This represents a 26.4% increase from June and a 20% rise year-over-year. The share of EV sales accounted for 9.1% of total passenger vehicle sales, the largest ever recorded, according to Cox Automotive data.
Impact of Tax Credit on EV Affordability
The $7,500 tax credit aims to make EVs more affordable, aligning with policies to reduce greenhouse gas emissions. Despite higher upfront costs, EVs are generally cheaper over their lifecycle compared to gasoline vehicles. The average price for new EVs was $55,689 in July, but with the tax credit, it nears price parity with gasoline cars.
Dealers Boost Sales Incentives
Dealers are leveraging the approaching deadline to enhance sales, offering additional financial incentives. On average, new-EV buyers received $9,800 in incentives in July, representing 17.5% of the average transaction price.
