I’m just curious about how safe it is to wait until next year to buy an EV or if it would be better to buy this year due to the tax credit situation. I know changing the tax code can be a lengthy process, but I’m not super familiar with tax policy.
This post from yesterday has good info.
This year is safe since tax codes can’t be changed retroactively. Even if Congress passes a bill in 2025, it likely won’t go into effect until 2026. Most likely, either the EV tax credit will be eliminated entirely, or they could exclude plug-in hybrids. Unallocated NEVI funding might also get cut, so the current administration will need to act fast to secure it.
They don’t necessarily need to repeal it outright. The Department of Energy or IRS could simply decide no vehicles qualify anymore or could disable the eligibility check system. It’s hard to predict these things now.
@Michael
This is misinformation.
I’d suggest buying a car when you need it for the best deal. But if I were to bet, I’d say there’s a chance the credit will be eliminated or changed next year. Detroit automakers could be favored, but Tesla might still be in a better position politically. Also, tariffs could increase prices, especially on imports, so maybe run the numbers and see if it’s worth buying now.
I’d be surprised if the used EV tax credit sticks around since it mainly benefits low- to moderate-income households.
To change the law, Congress has to pass it in both houses, and Trump would need to sign it. Since Republicans control both houses, it could be easier, but there are still other priorities. Trump might try to cancel it via executive order, although it might not hold. If you’re in the market, I’d suggest buying within the next few months, as there may be a rush in the EV market.
If the credit is still applied at the time of sale, you’re likely safe. Even if Congress makes changes, they usually wouldn’t apply retroactively.
abidemi said:
If the credit is still applied at the time of sale, you’re likely safe. Even if Congress makes changes, they usually wouldn’t apply retroactively.
It’s possible to get the credit at the point of sale in January, but if they repeal it in February, you might owe the $7,500 back in 2026. That would be pretty harsh, so it’s not too likely.
Even if the credit goes away, it could push automakers to innovate and lower prices to stay competitive with gas cars.
Christopher said:
Even if the credit goes away, it could push automakers to innovate and lower prices to stay competitive with gas cars.
More likely, ending the credit would make some automakers slow down or abandon EV development altogether, especially if environmental regulations are relaxed.
Why not buy used and avoid worrying about tax credits?
The EV Tax Credit has been around since 1992. It’s probably going to stick around in some form.
Hard to predict what’ll happen when Trump is involved.