Trump Wants To End the EV Tax Credit — Should You Buy One Before It Expires?
Written by
G. Brian Davis
Edited by
Zuri Anderson
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The Inflation Reduction Act of 2022 created a tax credit up to $7,500 for electric vehicles (EVs), as detailed by the IRS. It caused a surge in EV purchases in 2023 — Kelley Blue Book reported sales leaping 52% by the fourth quarter.
The Trump Administration has vocally taken aim at the tax provisions, however. Upon taking office, Donald Trump issued an executive order to eliminate the “electric vehicle mandate,” according to CNN.
Does that make now a good time to buy an EV, with the juicy $7,500 tax credit on the chopping block? Several experts weigh in.
Don’t Buy If You Don’t Need a New Car
If you don’t need a new car, then buying one represents an unnecessary expense, regardless of potential tax perks.
“You should never make a major financial decision out of fear,” points out Melanie Musson, an auto industry expert with AutoInsurance.org. “Don’t buy something you wouldn’t have otherwise, just because you don’t want to miss a tax break.”
Or do, but acknowledge that you’re justifying a bad financial decision to buy something you want but don’t need.
Buy Now If You Actually Need It
On the flipside, if you were planning to buy an EV this year anyway, you may want to act sooner rather than later.
“Moving a purchase up a few months makes sense if you had already decided to buy it,” added Musson.
“Waiting for a political choice to sort itself out could leave you empty-handed. Take it before it’s off the table,” said Alex Black of EpicVIN.
Inventory Levels Higher
Black goes on to note that EV inventory levels have risen, as sales and deliveries have increased this year, per Cox Automotive.
“Inventories are finally catching up. You are not on a six-month waiting list like in the height of the shortages,” he said. “If you like what you find now and it qualifies, take it.”
Next-Generation Battery Technology Still Years Away
Rapidly-changing EV technology has led some would-be buyers to wonder if they shouldn’t just wait an extra year or two to score dramatically higher performance. After all, the technology remains relatively young, and EV range and charging times have improved sharply over the last decade.
Pragathi Darapaneni works on EV battery research and development as an engineer at Schaeffler Asia. She cautions buyers against holding out for short-term gains.
“The next generation of battery technology is still in development,” Darapaneni said. “If you’re waiting for major leaps in range, charging time or cost, you’re better off capitalizing on today’s incentives and upgrading in five to seven years when solid-state and other advanced chemistries mature.”
Nearly half (45%) of EV owners say they wouldn’t have bought an EV without the tax credit, according to a survey by Insurify. A third (32%) say they wouldn’t be able to afford to buy a new one without the tax credit.
If you need a new car in the next six months and have had your sights set on an EV, there’s no time like the present.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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