The Big Beautiful Bill will remove federal tax subsidies for new, used, and leased electric vehicles starting in October. This change may prompt car manufacturers to cut production to avoid excess inventory as the September deadline approaches. Consumers have a limited time to act if they wish to benefit from the $7,500 tax credit on new EVs and a $4,000 credit on used EVs. Leasing options will also lose their tax advantages as of September, potentially leading to a surge of last-minute buyers in the EV market.
"To mitigate the financial impact and potential inventory problems, we think OEMs may decide to reduce EV production in the U.S. starting as early as Q325," UBS analysts wrote on Friday.
The federal tax credit for new, used, and leased EVs will end in September, forcing buyers to act quickly to save up to $7,500.
The $4,000 purchase credit for used EVs is also going away come September, signaling a major shift in the EV market.
Effective October, the Trump administration will stop subsidizing the purchase of EVs despite increasing the debt ceiling by $5 trillion.
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