FI showroom red and grey logo
MenuMENU
SearchSEARCH

EV Tax Credits on Chopping Block

Meanwhile, plentiful supply creates sales opportunities.

May 13, 2025
EV Tax Credits on Chopping Block

Some of the first-quarter EV sales surge came in consumers getting ahead of any trade tariff push on vehicle prices.

Credit:

Pexels/Tom Fisk

2 min to read


As the Trump administration and congressional Republicans target electric-vehicle subsidies, consumers have a potentially fading chance to  get deals, just as EV prices have come in line with gas-powered models.

House Republicans proposed this week to eliminate tax credits of up to $7,500 for EV purchases that have boosted sales of electrified vehicles and put EV transaction prices on par with those for internal combustion engine vehicles.

Ad Loading...

Combined with axing incentives for clean-energy production, the tax credit tanking would go toward the Trump administration’s tax-cut package.

With the EV tax credits still in place, the average transaction price for EVs is now $45,600, just $500 more than for ICE vehicles, according to J.D. Power research.

The House GOP proposal would phase out the EV tax credits, ending them completely by the end of next year. At that point, the average EV ATP would tick back up to $51,200, J.D. Power said.

The figures don’t take into account any inflation related to U.S. trade tariffs, which are still very much in flux.

Meanwhile, consumers can take advantage of plentiful EV inventory on dealer lots, which totaled about 155,000 new units this month, according to J.D. Power. It pointed out that the existing inventory also isn’t subject to tariffs because it was already in place before they took effect.

Ad Loading...

Automakers have introduced more EV models to answer regulatory pressures, bringing the number available on the U.S. market to more than 60, J.D. Power said. With the broad selection and lower ATPs, market share jumped 18% year-over-year in the first quarter, most of it from mass-market consumers.

Some of the first-quarter EV sales surge came in consumers getting ahead of any trade tariff push on vehicle prices.

If the EV purchase tax credits indeed end, it’s unknown if the cost difference will be passed along to consumers and how the change will affect EV sales.

LEARN MORE: Chevy Is Electrified

More Showroom

White electric vehicle parked at charging station.
Showroom•by Lauren Lawrence•October 12, 2026

EV Buyer Consideration Shifts

What drives American consumers to purchase an electric vehicle is shifting as the question moves away from Should I?' to 'Which features and experience do I want to have?'

Read More →
Door handle in interior of new-looking vehicle
Showroom•by Hannah Mitchell•October 1, 2026

Year-to-Date Auto Sales Holding Their Own

A forecast through August shows that automakers have shifted strategies to keep deliveries and revenues up despite tariffs and other economic challenges.

Read More →
Interior of BMW ix3 electric SUV with hilly landscape seen through windshield
Showroom•by Hannah Mitchell•September 28, 2026

Slow to Robo

Ten years of polling consumers shows autonomous vehicles’ profiles have risen considerably, but even more people now want at least some level of control if they go that route.

Read More →
Ad Loading...
Photo of red SUV parked outside a car dealership after dark
Showroom•by Hannah Mitchell•September 9, 2026

Dealers a Little Down

A third-quarter Cox Automotive survey finds them in a mixed mood, bummed by fallen customer traffic but encouraged by better profits, costs and EV interest.

Read More →
Silver car driving down road with graphic that says “Europe Plugs In”
Showroom•by Lauren Lawrence•September 9, 2026

European EV Sales Skyrocket

The EV market on the continent held strong in July with almost 25% of new-car sales being fully electric units, a stark contrast to the U.S., where EV sales declined about 42%.

Read More →
Mitsubishi shadow line-up
Showroom•by Hannah Mitchell•August 25, 2026

Mitsubishi Unveils U.S. Plan

The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.

Read More →
Ad Loading...
A rear view of a red Hyundai Elantra
Showroom•by Hannah Mitchell•August 17, 2026

Used Lots Getting the Business

Many consumers are seeking out the units to save money, and the demand – higher in July than normal – is keeping supply limited and prices up.

Read More →
outside shot of two trucks in front of a body of water with a cloudy sky
Showroom•by Lauren Lawrence•July 29, 2026

Used Market Stabilizes

The Carfax Used Car Index noted a major drop in used-vehicle price increases in July after several months of hikes.

Read More →
Twilight of white hybrid car.
Showroom•by Lauren Lawrence•July 22, 2026

California Hybrids Reach State Record

The Golden State still leads the country in electric-vehicle registrations, but much like the rest of the U.S. its hybrid market share is up while full electrics stabilize after a dramatic first-quarter dip.

Read More →
Ad Loading...
White meeting room in car dealership with rims displayed on wall and projected screen
Showroom•by Hannah Mitchell•July 22, 2026

My Mercedes in the U.S.

The German brand debuted its studio dealership concept for the first time in the states in Los Angeles, tapping Americans’ penchant for creative distinctions.

Read More →