US Federal EV Tax Credit Ended in 2025: What Are Your Options Now?
The $7,500 federal EV tax credit was terminated in September 2025. Here's what happened and how you can still save money on an electric vehicle.
NextGreenPath
EV Expert
US Federal EV Tax Credit Ended in 2025: What Are Your Options Now?
If you've been Googling "is the federal EV tax credit gone?" or "can I still get $7,500 for an electric car?" — I have bad news and good news.
The bad news: Yes, the federal credit is gone. The good news: There are still plenty of ways to save thousands on an EV purchase. Let me walk you through exactly what happened and what your options are now.
What Happened to the Federal EV Tax Credit?
On September 30, 2025, the federal Clean Vehicle Tax Credit was officially terminated. This happened as part of the "One Big Beautiful Bill" (OBBB), a massive budget reconciliation package that reshuffled federal spending priorities.
Here's what we lost:
For context, the credit had been around in various forms since 2008. The Inflation Reduction Act of 2022 had actually expanded it significantly, adding the used vehicle credit and the point-of-sale option. All of that is now history.
Why Did They Kill It?
The politics are complicated, but here's the simplified version:
The official reasoning:
What critics say:
Regardless of why, the result is the same: no more federal help for EV buyers.
The Silver Lining: State Rebates Are Stepping Up
Here's where it gets interesting. Several states saw the writing on the wall and beefed up their own programs. Some are now offering MORE than the old federal credit.
Top State Rebates in 2026
| State | Max New EV Rebate | Max Used EV | Notes |
|---|---|---|---|
| California | $7,500 | $2,000 | Income-based tiers, CVRP program |
| Oregon | $7,500 | $5,000 | Higher for low-income buyers |
| Connecticut | $7,500 | $3,000 | CHEAPR program, instant rebate |
| Maine | $7,500 | $2,500 | Efficiency Maine program |
| Colorado | $3,500 | Limited | Decreasing from previous years |
| New Jersey | $4,000 | None | Plus NO sales tax on EVs! |
| Vermont | $5,000 | $5,000 | Income-based, great for used |
| Massachusetts | $3,500 | $3,500 | MOR-EV program |
Pro tip: In New Jersey, the combination of the $4,000 rebate PLUS zero sales tax can save you $6,000-$8,000 on a typical EV. That's actually better than the old federal credit in many cases.
How to Claim State Rebates
Unlike the old federal credit (which was a tax credit you claimed when filing), most state programs work differently:
Always check your state's specific program before purchasing. Funds can run out, and rules change frequently.
Manufacturer Incentives: The New Battlefield
With the federal credit gone, automakers are competing harder for your business. Here's what's available right now:
General Motors
Ford
Hyundai/Kia
Tesla
Rivian
Strategy tip: These incentives change monthly. Before you buy, check the manufacturer's website AND ask the dealer what current offers are stackable.
The Math: Do EVs Still Make Sense Without the Credit?
Let's be real about this. The federal credit made EVs a no-brainer for many buyers. Without it, you need to do the math more carefully.
Scenario 1: California Buyer (Still Good)
Chevy Equinox EV LT - $42,000 MSRP
That's actually BETTER than before the federal credit ended!
Scenario 2: Texas Buyer (Tougher)
Same Chevy Equinox EV LT - $42,000 MSRP
Still not bad, but $4,500 more than our California buyer.
Scenario 3: Long-Term Savings Still Win
Even paying full price, the operating cost savings are substantial:
| Over 10 Years | Gas Sedan | EV (no incentives) |
|---|---|---|
| Purchase | $32,000 | $42,000 |
| Fuel | $18,000 | $4,500 |
| Maintenance | $6,000 | $2,500 |
| Total Cost | $56,000 | $49,000 |
The EV still saves you $7,000 over a decade — it just takes longer to break even.
Used EVs: The Secret Weapon
Here's something most people overlook: the used EV market is incredible right now.
Why Used EVs Are a Smart Play
Best Used EV Deals Right Now
| Model | Year | Typical Price | Original MSRP | Range |
|---|---|---|---|---|
| Tesla Model 3 | 2022 | $27,000 | $47,000 | 270 mi |
| Chevy Bolt EV | 2023 | $20,000 | $32,000 | 259 mi |
| Hyundai Ioniq 5 | 2023 | $32,000 | $50,000 | 300 mi |
| Ford Mach-E | 2022 | $28,000 | $48,000 | 250 mi |
| VW ID.4 | 2022 | $24,000 | $42,000 | 260 mi |
A 2023 Chevy Bolt for $20,000 with 259 miles of range is genuinely hard to beat.
What About the Future?
Will the Federal Credit Come Back?
Maybe, but don't count on it:
My advice: Make your decision based on today's reality, not hopes for tomorrow.
EV Prices Are Falling Anyway
Here's the thing: EV prices have dropped 20-30% since 2023. Competition is fierce. Even without incentives, EVs are more affordable than ever.
The real question isn't "should I wait for the credit to come back?" It's "does an EV make sense for my life right now?"
Action Steps: How to Maximize Your Savings
The Bottom Line
Yes, losing the federal EV tax credit stings. But it's not a death blow for EV buyers.
Between state rebates, manufacturer incentives, falling prices, and long-term fuel savings, EVs still make financial sense for most drivers — especially if you're in a state with active incentive programs.
The transition to electric vehicles was never going to depend on tax credits forever. We're now seeing what the market looks like on its own, and honestly? It's still pretty compelling.
Last updated: February 2026. State programs change frequently — always verify before purchasing.
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