Federal EV Tax Credits Set to Expire Sept. 30: What Buyers Need to Know Now

Prospective electric vehicle (EV) buyers have a crucial deadline approaching: federal tax incentives for EVs will officially end on September 30. This change follows a significant tax and spending bill recently passed by Congress, which terminated the previous federal tax credits of up to $7,500 for new EVs and $4,000 for used models.

While the elimination of these credits is expected to impact affordability, particularly for lower and middle-income Americans, experts emphasize that strong financial and environmental reasons still exist to consider an EV purchase. Ingrid Malmgren, Senior Policy Director at Plug In America, noted the disappointment, highlighting the credits’ role in making EVs accessible and reducing transportation costs.

Despite a higher initial purchase price—new EVs average about $9,000 more than gas cars, and used EVs about $2,000 more—the long-term ownership costs often favor electric vehicles. Malmgren explains that significant savings on fuel and maintenance typically outweigh the upfront difference. EVs are considerably cheaper to ‘fuel’ and require less frequent servicing due to fewer moving parts, leading to lower upkeep costs over the vehicle’s lifespan.

Furthermore, the environmental benefits of EVs remain undeniable. While manufacturing an EV initially creates more pollution than a traditional car, this disparity evens out after approximately 15,000 miles of driving. Beyond that point, EVs significantly reduce overall emissions. Even when charged using electricity from coal-heavy grids, an EV in states like West Virginia still produces 31% less pollution than a comparable gas-powered car, according to a 2023 Yale Climate Connections analysis. Peter Slowik, U.S. Passenger Vehicles Lead for the International Council on Clean Transportation, underscores their efficiency, noting that popular EV models can travel over 100 miles on energy equivalent to a single gallon of gasoline.

As the Sept. 30 deadline approaches, potential buyers considering an EV purchase should factor in these long-term benefits, even without the federal incentives, and explore any remaining state-specific programs.

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