Electric Vehicle Tax Credits Expiring September 30, 2025
Thinking about buying or leasing an electric vehicle? Some of the most generous federal tax credits are set to expire or shrink in the coming months.
Thinking about buying or leasing an electric vehicle (EV)? Now might be the time to make your move — because some of the most generous federal tax credits are set to expire or shrink in the coming months.
Thanks to recent legislation known as the One Big Beautiful Bill (OBBB), the clock is ticking on several key tax savings incentives when you go electric. Here’s a quick breakdown of what’s changing — and how to take advantage of it before it’s too late.
Federal EV Tax Credit – Up to $7,500 (Expiring Soon!)
The federal government currently offers up to $7,500 in tax credits for new EVs that meet certain requirements for battery and mineral sourcing. There’s also a separate $4,000 credit for used EVs. These credits fell under the Clean Vehicle Credit, the Previously Owned Clean Vehicle Credit, and the Qualified Commercial Vehicles Credit. There are qualifications as to which vehicles qualify for the credit and there are also Adjusted Gross Income limitations for taxpayers to qualify. In other words, not everyone qualifies (based on income) and not all EVs qualify.
But here's the big news: The federal EV tax credit is ending for most buyers after September 30, 2025.
This includes credits for:
New EV purchases
Used EV purchases
Commercial vehicle purchases
EV leasing (more on that below)
What counts as the deadline?
The vehicle must be placed in service (i.e., delivered and ready for use) on or before September 30, 2025 — simply placing an order or making a payment doesn’t count.
If your car isn’t delivered by the deadline, you won’t get the credit, even if you ordered it months earlier. So if you're thinking about ordering a new EV, it's wise to plan ahead — especially since delivery times can be unpredictable.
Leasing an EV? The “Loophole” Is Closing
Right now, many EV leases include the $7,500 federal credit — even on cars that wouldn’t qualify for the purchase credit due to price or sourcing rules. This is because the credit technically goes to the leasing company, which often passes the savings to you through lower monthly payments.
That benefit disappears after September 30, 2025 too.
So if you’re thinking about leasing an EV, doing so before the deadline could make a big difference in your monthly cost.
Bonus: EV Charger Tax Credit
Planning to install a home charging station?
The federal tax credit for EV chargers (30% of the cost, up to $1,000) is still available through June 30, 2026, as long as you're in a qualifying area (mostly low-income or rural communities).
Bottom Line: Don’t Wait Until 2026
If you’ve been on the fence about buying or leasing an EV, this is your heads-up: the best time to act is now — or at least before September 30, 2025.
Here’s why:
You’ll lock in federal tax credits that may disappear or shrink
Leasing an EV won’t be nearly as attractive after the “dealer loophole” closes
Supply chain and delivery delays could leave you without the credit if you wait too long
This newsletter is for general informational purposes and is not tax advice. Please consult your tax professional to determine your eligibility.