Crashing Electric Vehicle Sales Tied to $7500 Tax Incentive Eradication

According to Cloud Theory’s “On the Horizon” quarterly auto industry report released today, EV sales nosedived 74% from their 2025 peak with the $7500 Federal tax EV incentive kibosh put on by the “Big Beautiful Bill”.

Peaking at 22,997 units Sept. 22-28, the week before the incentive went away, following its elimination a paltry 5,929 EVs were sold Oct. 6-12. The EV tax incentive, part of 2022’s Inflation Reduction Act, boosted EV adoption, domestic manufacturing, and the charging infrastructure.

Forbes stated the onus shifts from the Feds to owners or the OEMs. The Tesla Model Y with a $40,000 purchase price on September 30th rose to $47,500 the next day. Fully electric vehicles will cost more than their gas-powered counterparts, reflecting their true appeal. Will EV ownership become unduly expensive as their acquisition becomes less financially appealing?

EV inventories slumped 47% from a June peak of 196,255 to 104,050 on Oct. 12. Not surprisingly, GM had the highest EV level at 39,164 units, followed by Ford with 21,432 and Hyundai at 14,725. The Japanese OEMs inventory was a modest 419 for Nissan, 435 at Toyota, and 2,138 for Honda.
Other OEMs have pulled back U.S. EV allocations amid policy uncertainty and tariff pressures.

The industry is recalibrating EV demand, with OEMs lowering retail prices or passing the cost onto the consumers. Regardless, EVs have become less popular without tax credits, declared CNBC.