Federal EV Tax Credit - RIP - Game over for me. What will happen?

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Mark W

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This post has two parts, 1) What is your prediction about how the end of the federal EV tax credits will affect the US EV car market, and 2) my personal discussion of my EV journey and how it will affect me. Many may not be interested in my story, so feel free to skip down to the last 2 paragraphs

My introduction to EVs came in 2017. My third kid was getting his license, and my daughter was away with her Prius, and two cars for 4 drivers was tough. I didn’t want to spend much, and I feared unreliable used cars. Then I found a white 2014 Nissan Leaf SL that was in perfect condition for $9,000! Loved it from first drive! My EV journey was on. My journey was different from most though. It was defined not by environmental concerns, but by affordability.

I had always bought my cars outright, but federal and state tax credits made lease deals incredible. The new EVs I leased had sticker prices between $30-45k, and yet I paid super low lease prices on a Honda Clarity, Hyundai Ioniq, and finally a 2024 Toyota bz4x for $205/mo for 36 months with nothing down! With the death of the federal tax credit, I believe I won’t be buying any new cars for a looong time.

About 70% of non-Tesla EV sales were leases in 2025. I think the lack of the tax credit will cause a big drop in EV leases. I think it will take a year for sales to return to 2024 levels.

What do you think? How do you see the end of the tax credits affecting EV sales in both the short and long term?
 
I could not find a used 2024 Model 3 for $25k or less so no used EV credit.

My expectation is by Jan/Feb 2026, the excess supply of inventory will crash the prices to under $25k. I’ve already met with my bank loan officer and figured out how to get the best loan rate. I also have an expected $3k credit on my 2025 taxes due to the $9k battery purchase:
  • GOOD
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  • CHEAP
Bob Wilson
 
bwilson4web said:
I could not find a used 2024 Model 3 for $25k or less so no used EV credit.

My expectation is by Jan/Feb 2026, the excess supply of inventory will crash the prices to under $25k. I’ve already met with my bank loan officer and figured out how to get the best loan rate. I also have an expected $3k credit on my 2025 taxes due to the $9k battery purchase:
  • GOOD
  • FAST
  • CHEAP
Bob Wilson
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Well, the '24 would not have qualified for the used tax credit anyway, it had to be two model years old to qualify. I really wanted to replace our 2018 Honda Clarity PHEV with a 22 or 23 Kia EV6. There were some under $25k, but my wife didn't want to do it. I should have started working on her earlier than I did :). The used Tesla market is great for buyers right now. I'm not sure which way it's going to go. With the tax credits gone, I think the prices of used EVs will go up. The Tesla market is unique though because of the anti-Tesla sentiment, so not sure.
 
Mark W said:
The Tesla market is unique though because of the anti-Tesla sentiment, so not sure.
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  • 2023 LiFePO replaced NCA battery chemistry - Tesla no longer makes the NCA chemistry batteries and they are subject to chronological aging. Worse, Tesla plays games with pure profit "options." So my $9 k battery replacement is the last one anyone should ever put in the 2019.
  • 2024 Hardware 4.0 - entirely different so it can't be retrofitted into the 2019. Data suggests software de-support for Hardware 3.0 which is the last that will ever run in the 2019.
    • Replaced CAN bus 'ring' with redundant, gigabit ethernet rings. This is what ties the remote controllers to HW 4.0 computer.
The only reasonable mod to my 2019 would be to mount a working, BMW i3 Range Extender on a small trailer and use it as a range extender for the Model 3. It has battery range for around town and some routes but this morning, 142/75% = ~190 mile maximum range.

A 2024 Model 3, even though first model year with new hardware and chemistry battery, would meet my requirements. I can replace the tires and have what I need for a cross country Tesla. The 2019 can replace the BMW i3-REx, my current urban car and transportation solved.

Any pre-2024 Teslas should be dirt cheap or cheaper because their traction battery and control computer hardware are "End of Life." My expectation is the former subsidies for new Teslas should have loaded the used Tesla market with 2024 and over time, their value will decrease due to 'over supply'. January 2026 comes soon enough and along with the seasonal dip, I should be able to pickup a bargain priced, 2024 Model 3 while I squeeze the last utility from my 2019.

Bob Wilson
 
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Puppethead said:
BMW keeps the good times going with $7,500 off MSRP on all its EVs

Also:

The 2026 Hyundai IONIQ 5 gets a big price cut and now starts at just $35,000
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I am sitting in my 2017 BMW i3 REx that has an aluminum frame and carbon fiber body with a 25 kW, two cylinder, modified motorcycle engine driven generator. Parallel operation control laws so 37 MPG on the highway. BMW has nothing current that comes close (they chased off their best engineers.)

The Ioniq 6 has good specs but unknown driver assistance. The Hyundai forum reported a new version coming several months ago. Waiting on confirmation before a ‘kicking the tires’ visit to local dealer. But it looks to be $15 k more expensive than I want to spend.

My expectation is a used 2014 Model 3 should be available end of January or February for below $25 k.

Bob Wilson
 
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Hyundai just announced a big price cut on the Ioniq5. If they can sustain that, sales will be okay. And new, less expensive models are on the way -- the new Leaf (though supply will apparently be limited for a while) and Bolt among them, which should help sustain the overall EV market. That said, EV sales will certainly be down for a couple quarters at least.
 
I noticed, "Hilo, Hawaii". I'm reading a lot about EV shipping bans. How is your situation?

I'm especially curious about your Tesla battery health. What year and what is the indicated range and equivalent percentage?

I found one credible report about NCA (or NMC) battery chemistry and chronological aging. With limited miles available and a benign climate, Hawaii Teslas, especially before model year 2023, should be excellent data points about chronological aging of traction batteries.

Bob Wilson
 
There is one company shipping EVs here, and I have not heard of problems, though I may have missed something. My car is a Hyundai Kona EV, so I have no clue about Tesla batteries. My battery does not seem to have deteriorated at all ( though I only drive about 7,000 miles per year.).
 
Bruce M. said:
There is one company shipping EVs here, and I have not heard of problems, though I may have missed something. My car is a Hyundai Kona EV, so I have no clue about Tesla batteries. My battery does not seem to have deteriorated at all ( though I only drive about 7,000 miles per year.).
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Per Google:

The Hyundai Kona Electric uses a liquid-cooled lithium-ion battery with a Nickel Manganese Cobalt (NMC) chemistry​

Doesn't sound like the NCA chemistry my 2019 Tesla is supposed to have and the research paper on battery aging described. This is the source:
upload_2025-10-5_0-7-59.webp

I reached out the the Hawaii Tesla Club but we're in "message" dialog. Not sure they understand me.

Bob Wilson

 
I feel like there are a myriad of factors that affect EV sales and while the tax credit is a factor in price, what happens remains to be seen. Also I'm not about predictions, I'm about looking at data and longer term trends, rather than a few quarters or even a year or two. TLDR version, as long as BEV sales are greater than 250,000 per year or 2% market share, EV adoption will increase in the next few years.

Longer version for the data nerds. Full disclosure, I have been tracking BEV sales since 2018 and compiling publicly available information where I can. Data from 2017 through 2023 were a mix of Inside EV's articles and the Good Car Bad Car website reporting of sales both by model (some of them were estimates as BEV sales were not directly reported) and cumulative. Data from 2024 and through 3Q 2025 are based on Cox Automotive EV sales reports. Registration state-by-state data is from 2016 through 2023 and is on the USDOE Alternative Fuels Data Center (AFDC) Alternative Fuels Data Center: Vehicle Registration Counts by State. The AFDC also includes US totals by fuel type. The percentage calculations are based on the US totals on the AFDC website.

For BEV's in the US 2017, sales were a little over 100,000 with a total 0.14% of the light duty fleet. At the end of 2018 in the US, BEV's had a 1% new vehicle sales market share (about 240,000 sales) and were 0.2% of the total fleet (over 600,000 cumulative sales). Probably a minimal number that were being taken out of service. As tax credits ended for Tesla and Chevrolet (total 87% market share 2018 through 2020) total BEV sales leveled off in volume while % of new sales rose to 1.8% and percent of total fleet to 0.4%. Through the end of 3Q, 2025 US BEV sales were 8.5%, represent 2% (over 5,800,000) of the total fleet, and per Recurrent about 100,000 BEV's will be taken out of service this year. That is the equivalent of less than 1% new vehicle sales of (2009) the worst new vehicle sales total in decades. As long as new BEV sales are larger than the number of BEV's taken out of service, the total number and percentage of BEV's in the US are increasing.

Per the AFDC registered vehicles by fuel type and state for data from 2016 to 2023, hybrids, plug-in hybrids, and biodiesel fuel types are also increasing. Hybrids had 1.4%(3,740,000) in 2016 and 2.6% (7,392,000) in 2023. That is likely closing in on 4% and over 10,000,000 vehicles by now. Plug-In Hybrids had 0.1%(254,000) in 2016 and 0.46% (1,307,000) in 2023. That is likely closing in on 0.7% and 2,000,000 vehicles by now. Biodiesel went from zero vehicles in 2016 to 1% (2,803,000) in 2023.

Gasoline fuel type vehicles have had an increase from 224,855,000 in 2016 to 242,870,000 in 2023. There has been a decrease in the percentage of light duty gasoline (per AFDC registration data) vehicles from 85.6% in 2016 to 84.6% in 2023.

Meanwhile, there are a few fuel types that have had decreasing numbers from the AFDC earliest posted data year 2016 to the latest data year 2023. Ethanol/Flex (E85) has gone from 8.4% (22,100,000) of the fleet in 2016 to 7% (20,240,600) of the fleet in 2023. Compressed Natural Gas (CNG) has gone from 0.3% (721,000) of the fleet in 2016 to 0.09% (24,700) in 2023. Methanol has gone from 500 registered vehicles in 2016 to zero registered vehicles in 2023. Diesel has gone from 2.9% (7,734,000) of the fleet in 2016 to 2.5% (7,184,000) in 2023. Unknown fuel (kind of a catch -all for everything else) has gone from 1.1% (3,000,000) of the fleet in 2016 to 0.6%(1,694,700) in 2023.Rounding out the AFDC list of fuel types are Hydrogen (1,300 in 2016, 16,900 in 2023), Propane (0 in 2016, 6,000 in 2023) and Methanol (500 in 2016, 0 in 2023) which are all less than 0.01 percent of the fleet.
 
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