EV Sales Skyrocket as US Tax Credit Window Shrinks

Electric vehicle sales in the U.S. have surged in recent weeks as buyers rush to purchase battery electric vehicles (BEVs) before the federal tax credit for EV purchases expires. Established under the Bush administration in 2008 and adapted by the following two administrations, the tax credit supported hundreds of thousands of electric vehicle purchases in the U.S. and played a key role in getting the country’s nascent electric vehicle industry off the ground. 

However, with the credit set to expire on September 30, buyers in the U.S. are racing to take advantage before the window closes, resulting in a surge in EV purchases across the country. 

The credit played a huge role in facilitating EV sales by subsidizing purchases by up to $7,500, making EV ownership more attainable for drivers who couldn’t afford an EV or justify spending over $10,000 more on an electric car. With one of the main barriers to electric vehicle sales being the high prices associated with most models, especially in the U.S., the tax credit accelerated the growth of America’s fledgling BEV industry. 

Unfortunately, the recently passed Big Beautiful Bill set an expiration date for the tax credit, bringing it to an end after over a decade of helping thousands of drivers across the country switch to electric mobility. 

Under the Biden administration’s Inflation Reduction Act (IRA), the federal tax credit would have been available to American consumers until December 2032. But now that it has just two months left, Cox Automotive senior analyst Valdez Streaty says the U.S. may experience record EV sales in the third quarter of 2025 as buyers scramble to use the credit. 

Customers bought close to 130,100 new electric vehicles last month, making July the second-highest month for EV sales in U.S. history after December (136,000 units). According to Streaty, July sales data showed a 26.4% increase from June and represented a year-over-year sales increase of nearly 20%. 

Cox Automotive data also shows that electric vehicles accounted for around 9.1% of total passenger vehicle sales in July, setting a new monthly record for market share. Director of market insights at EV data provider and marketplace Recurrent, Liz Najman, says the company has noted a significant increase in new electric vehicle sales. 

Used electric cars are also in demand, with Cox data revealing that almost 36,700 second-hand electric cars were sold in July, setting another monthly sales record. Najman notes that models like the Hyundai IONIQ 5, Honda Prologue, and Chevy Equinox EV sold in record-breaking numbers in July. 

With the federal incentive set to vanish, the coming weeks will likely mark one of the most frenzied periods in U.S. EV sales history. Dealers, buyers, and automakers are locked in a final push, knowing the market may cool once the financial boost disappears. Whether this momentum carries forward will depend on pricing, innovation, and consumer confidence. 

Hopefully, the uptick in sales during the final months of the tax credit will give all EV industry actors, such as Massimo Group (NASDAQ: MAMO), a major boost that sets them up to ride on that momentum even when the incentive has expired. 

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