EV Tax Credit Expiry Spurs Surge In U.S. Electric Vehicle Sales

The Indian automotive market is gearing up for intense competition in the compact and mini electric vehicle segment, with companies like Hyundai and Mahindra planning launches by 2027, focusing on localized platforms tailored to Indian consumers. Meanwhile, in the U.S., Tesla electric vehicles demonstrate significant cost savings over gas-powered trucks, with charging costs often less than half the fueling expenses of comparable gasoline vehicles. However, the federal $7,500 EV tax credit, which has been a key incentive for buyers, is set to expire on September 30, 2025, as per President Trump's One Big Beautiful Bill Act, leading to a surge in EV purchases before the deadline and anticipated slowing of sales afterward. Despite the expiration, manufacturers and dealers are offering promotions such as 0% financing deals to sustain interest, and state and local incentives may gain importance in maintaining EV affordability. Experts note that while the federal tax credit has helped accelerate EV adoption somewhat, it has primarily benefited higher-income buyers and has not been the sole deciding factor for most consumers. The end of the tax credit is expected to impact sales dynamics, but electric vehicle adoption is projected to continue growing, albeit at a potentially slower pace.