Yes, federal electric vehicle (EV) tax credits were terminated for vehicles acquired after September 30, 2025. Legislation (P.L. 119-21) eliminated the up to $7,500 new and $4,000 used EV tax credits, which were previously set to last until 2033, in a move to cut federal deficits.
Congress passed legislation that will end federal EV tax credits as of September 30, 2025. Buyers can still qualify for these federal incentives if they meet requirements before the termination date. EVs may still offer long-term financial benefits even without federal tax credits.
The $7,500 tax credit for new EVs and the $4,000 credit for used EVs will vanish after September 30, 2025 – a full three months earlier than the House originally planned. And it gets more aggressive: leased EVs from non-U.S. automakers lose their credits immediately. The EV charger tax credit also ends in June 2026.
The EV tax credit expired on September 30, 2025. The year 2025 began with a 14% dip in EV sales to 300,000 units for each of the first and second quarters, from 350,000 units in the last quarter of 2024. But as the tax credit was coming to an end, sales surged 44% to a record 435,000 units in the third quarter of 2025.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
The **federal EV tax credit of up to $7,500** is officially set to expire on **September 30, 2025**. That means buyers of qualifying new electric vehicles—including select Volvo models—could lose out on thousands in savings if they wait too long.
Trump's disastrous budget law is eliminating tax credits that cut the costs of solar power, electric vehicles and home efficiency upgrades.
Premium Increases
As a result, premiums will increase significantly starting on Jan. 1, 2026. What this means is that premium tax credits are still available for 2026, but many people could receive less than they did before.
In 2019, when a previous version of the EV tax credit was phased out for Tesla and General Motors because both hit a prescribed sales target, those two automakers responded by cutting prices. EV sales have been growing steadily for years, and at a much faster pace than traditional gas-powered cars.
The Electric Vehicle Credit expires on September 30, 2025, meaning purchases made before this date may still qualify for up to $7,500 for new EVs, $4,000 for used EVs, and $40,000 for commercial EVs.
It has now been replaced by Universal Credit or Pension Credit. If you've received a migration notice letter telling you to claim Universal Credit or Pension Credit, read our guide Universal Credit Migration Notice to learn what to do next.
You won't be forced to buy an electric car (EV) overnight, but government regulations (like the EPA's emissions rules) and state mandates (like California's 2035 ban on new gas car sales) are pushing automakers to sell more EVs, effectively making them the primary new vehicle option in many places by the 2030s, though this is subject to political and industry changes, with debates ongoing about consumer choice and affordability.
But the end is in sight, as the government has declared that sales of petrol and diesel cars will end in 2030. Some car industry observers think this is ambitious, but either way, in a few years, there won't be many diesel cars on sale. They will survive beyond that, but by 2050, they could well be a rarity.
The ban on sales of new diesel and petrol models is due to come into place in 2030. As part of the government's recent changes, full hybrid and plug-in hybrid models will be permitted to stay on sale until 2035.
Tesla paid $0 in federal income tax last year. 2022: $0 2021: $0 2020: $0 2019: $0 2018: $0 Tesla reported $6.7 billion in profit in those years.
For Elon Musk, 42 primarily signifies a nod to Douglas Adams' The Hitchhiker's Guide to the Galaxy, representing the "Answer to the Ultimate Question of Life, the Universe, and Everything," but also serves as a reminder to keep asking better questions about humanity's future, with SpaceX Starship's design incorporating it as a philosophical Easter egg. He uses it to link deep space exploration with existential inquiry, urging consciousness expansion to understand life's true meaning, beyond just the number.