EVs face the market in a post-tax credit era
At the end of September 2025, the federal tax credits for electric car buyers expired. What does this mean for the future of electric cars? It certainly does not mean the end of electric vehicles as we know it. In fact, it may be good for electric cars and for electric car buyers and owners.
For one thing, electric cars will now have to compete on an even playing field with vehicles powered by other types of fuel, including diesel, hydrogen, gasoline-electric hybrid, plug-in hybrid and whatever else happens to come. That will just make electric cars better. The impact is already being seen in the marketplace.
Reduced prices?
Some automakers are reducing prices (Hyundai is an example) or offering other types of financial incentives on electric vehicles. This is good news, but it isn’t the same as the government using taxpayer money to incentivize a certain type of consumer product.
In fact, when an automaker offers a discount, low financing rates or any other kind of incentive for an electric car, it’s really just lowering the price — so that could simply make electric cars more cost-effective.
The elimination of the federal incentive does mean we have fewer electric cars to choose from in the short term. Just like with gasoline-powered cars, the vehicles that don’t resonate with consumers or don’t have a compelling value proposition end up revised so they’re more competitive — or canceled altogether. The result would likely be that the best cars will rise to the top.
We’ve already seen mainstream automakers cancel or pause production of certain electric models in the U.S., such as the Acura ZDX, the Genesis Electrified G80 and the Nissan Ariya. Cars that consumers like and come back to time after time are the ones that will remain.
Short range electric cars?
Another possible result of discontinued EV tax credits may be several all-new models, increasing consumer choice in the long run. It’s counterintuitive, but we could see startups like the no-frills Slate emerge with a new crop of low-priced electric models.
However, nearly all new electric car companies have come and gone rapidly. Arrival, Better Place, Bright Automotive, Canoo, Coda, Dyson EV, Fisker, Lordstown Motors and Proterra are prime examples.
It’s easy to look at Tesla as a success story, but Tesla is an anomaly — successful almost as a fluke.
Even Rivian, with slick-looking, highly functional trucks and SUVs, is still fighting for sustained profitability. Despite fleet contracts with Amazon, AT&T and HelloFresh, Rivian reduced its workforce by 4.5% in the fall of 2025. Cox Enterprises, which owns The Atlanta Journal-Constitution, also owns about a 3% stake in Rivian.
Price matters
One of the biggest barriers for consumers considering an electric car is the purchase price. While EV ownership is typically less expensive over time than a gasoline-powered vehicle — thanks to lower fuel costs and less frequent maintenance — purchase price, interest and depreciation must factor into the total cost equation. According to Cox Automotive data, the average transaction price of a new electric car in late 2025 was nearly $59,000 — about $10,000 more than the average gas-powered model.
However, several new models from existing brands or from new companies might be successful if they can reduce the price significantly. One way to do this would be to reduce the size or capacity of the battery in a fully electric vehicle.
Battery costs
A 2023 Deloitte automotive study found batteries account for 40% of an EV’s total cost, far more than the powertrain share in most internal combustion engine vehicles. Big range means a big battery. That’s why EVs with 300- to 500-mile ranges are so expensive.
As EV drivers become more accustomed to their actual daily driving distances, shorter-range electric cars could reduce overall costs, and manufacturers could price electric models competitively with gasoline vehicles.
Another approach: Offer one model across multiple powertrains — hybrid, plug-in hybrid and fully electric. The Kia Niro and the new Toyota Corolla Concept are examples of this strategy.
How to get a deal on an EV now
Shop used. A previously owned EV can be an amazing value. New cars, especially electric ones, depreciate rapidly, and you can use that to your advantage. Listings on Autotrader and other marketplace sites frequently show lightly used electric models such as the Chevrolet Bolt and Nissan Leaf for about $15,000, with many listings below $10,000.
Watch manufacturer rebates and rate specials. With the government’s tax credit gone, automakers have more incentive to lure potential buyers with discounts and promotional APR offers. Recent examples include the Chevrolet Equinox, Kia EV6, Hyundai Ioniq 6, Lucid Air, Rivian R1S, Ford Mustang Mach-E and BMW iX, with price reductions, low financing or both.
Be honest with range needs. Don’t pay for a battery you won’t use. Unless you routinely drive long distances, avoid extended-range models. Consider an EV with a smaller battery — it might be a smarter choice and likely a better value.
Ultimately, if you’re a fan of electric vehicles, you should applaud the end of the federal tax credit. Moving forward, EVs will have to prove themselves on value, usability and total ownership costs. Without the $7,500 incentive, most shoppers will evaluate EVs as tools, assessing how they serve their needs alongside other fuel types. For buying an electric car, now may be better than ever.
Brian Moody is a senior editor of Kelley Blue Book and Autotrader, which are part of Cox Automotive. He is an automotive expert specializing in transportation, car shopping, electric cars, in-car technology and future vehicles.
The Steering Column is a weekly consumer auto column from Cox Automotive. Cox Automotive and The Atlanta Journal-Constitution are owned by parent company, Atlanta-based Cox Enterprises.
