On October 1st, the industry is prepared for a sharp drop in sales of electric vehicles in the United States, as a tax credit of up to $7,500 when purchasing electric vehicles (EVs) ended at the end of September. Photographed May 14th in Carlsbad, California (Reuters, 2025)
[デトロイト １日 ロイター] – With the US system that will receive a tax credit of up to $7,500 when purchasing electric vehicles (EVs) in the United States, ending at the end of September, the industry is prepared for a sharp decline in domestic EV sales.
Farley said he wouldn’t be surprised if the proportion of EVs in total U.S. car sales fell to 5% in October. It was only about half of August when the last minute effect was achieved before the tax credit was terminated, and it was the lowest in the past few years.
Meunier, who was interviewed at the end of September, predicted that there will be a battle for buyers. “We have a huge inventory, so competition is extremely fierce. Our competitors produced a lot of EVs,” he said.
The $7,500 tax credit was approved by Congress in 2008 and was extended under the Inflation Control Act (IRA) of the previous Biden administration, limited to domestically produced EVs that use a certain percentage of batteries and raw materials procured in the United States.
However, the Tax and Expenditure Act, which President Trump signed in July, includes the end of September of the system being terminated. The Trump administration has also put forward other measures that will slow down sales of EVs, including suspending rules for fines on manufacturers that have not met fuel efficiency standards.
A joint survey conducted last November by professors at the University of California, Berkeley, Duke University and Stanford University showed that without tax credits, EV sales could fall 27%.
At this stage, the US EV penetration rate is lower than that of other major markets. China, the world’s leading producer of EVs, in-vehicle batteries and raw materials, has surpassed 40% of new car sales in recent months. The penetration rate in Europe has also reached nearly 20%.
Meanwhile, the US has received tax credits and despite a series of new vehicles being introduced by companies, EV sales growth has slowed for the past two years. According to Cox Automotive, EV sales growth in the first half of this year was just 1.5% year-on-year.
Some U.S. dealers are worried that the abolition of tax credits will cause unselling.
Scott Kunes, the chief operating officer at a Midwest retailer group, announced that he plans to reduce the number of EVs he purchases from manufacturers for the time being and assess consumer demand trends.
Reuters reported this week that GM and Ford are introducing a program that will continue to apply the same deduction to EV lease agreements to ease the headwinds of eliminating tax credits.
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