The federal EV tax credit has expired, but automakers are stepping up with aggressive incentives to keep electric vehicles affordable.
The federal $7,500 electric vehicle tax credit officially expired on September 30, 2025, but prospective EV buyers shouldn’t despair. Major automakers are stepping up with aggressive discounts, creative financing arrangements, and substantial price cuts that rival or even exceed the value of the now-defunct federal incentive.
Rather than marking the end of affordable EVs, the expiration of the tax credit has triggered a competitive response from manufacturers determined to maintain sales momentum. From Hyundai’s nearly $10,000 price reduction on the Ioniq 5 to clever financing workarounds from Ford and GM, the EV market is proving more resilient than skeptics predicted.
Major Price Cuts Lead the Charge
Hyundai made perhaps the boldest move in response to the tax credit’s expiration. The automaker slashed prices on its 2026 Ioniq 5 lineup by up to $9,800, with reductions ranging from $7,600 to $9,800 depending on the trim level. The base SE Standard Range model now starts at just $36,600 before destination charges, putting it squarely in competition with the Chevrolet Equinox EV.
What makes this particularly compelling is what buyers get for that price. The Ioniq 5 rides on an advanced 800-volt architecture that enables some of the fastest charging speeds available in the United States. It’s technologically superior to many competitors at similar price points, including the Toyota bZ4X and even the base Chevy Equinox EV.
Hyundai isn’t stopping there. The company announced it will continue offering $7,500 cash incentives on remaining 2025 model year Ioniq 5 vehicles through October, effectively replacing the federal tax credit with manufacturer-funded discounts.
Creative Financing Solutions Emerge
General Motors and Ford have implemented an innovative strategy to extend the benefits of the tax credit beyond its September 30 expiration date. Both automakers are having their financing arms purchase EVs on dealer lots with initial down payments, which qualifies those vehicles for the now-expired tax credit under existing purchase contracts.
This creative arrangement translates to lower purchase prices or reduced monthly lease payments for consumers. While the mechanics are complex, the result is straightforward: buyers can still access substantial savings comparable to the federal incentive.
Rivian Maintains Aggressive Rebates
The electric vehicle startup Rivian is keeping its promotional offers flowing. The company is providing a $6,500 rebate on select R1T pickup and R1S SUV models for customers who take delivery before October 31. These luxury electric vehicles, which start well above $70,000, become more accessible with such substantial discounts.
Will Americans Still Buy EVs Without Tax Credits?
Industry analysts initially predicted steep declines in EV sales following the tax credit’s expiration. Ford CEO Jim Farley estimated the EV market could shrink to just 5% of overall car sales, down from 11% in the third quarter of 2024.
However, recent polling data suggests Americans remain open to electric vehicles when pricing is competitive. A Harris Poll of more than 2,000 respondents conducted in late September revealed that the vast majority would still consider an EV if adequate incentives were available.
The numbers are telling: 60% of respondents who had previously considered but rejected EVs said they would need an incentive of at least $5,000 to reconsider. Nearly 30% indicated they would buy with incentives ranging from $2,500 to $4,999, while 11% would settle for less than $2,500.
Greg Paratore, a senior consultant at Harris Poll, emphasized that incentives matter because affordability remains the top concern for 64% of EV buyers. The current wave of manufacturer discounts directly addresses this primary barrier to adoption.
Affordable Models on the Horizon
The timing of these deals coincides with a wave of new affordable electric vehicles entering the market. The redesigned Nissan Leaf, boasting over 300 miles of range and a $30,000 starting price, is now available for order. Chevrolet’s next-generation Bolt EV is reportedly around the corner, with leaked information suggesting competitive pricing. Tesla is also developing a more affordable Model Y variant, though details remain scarce.
These upcoming models, combined with aggressive discounting on existing inventory, create a uniquely favorable environment for EV shoppers willing to act in the coming months.
The Bottom Line for Buyers
Despite the expiration of the federal tax credit, the EV market hasn’t collapsed. Instead, manufacturers are absorbing costs to maintain competitive pricing, though this strategy puts pressure on already-thin profit margins, especially as companies grapple with increased tariff costs.
For consumers, this means the window for exceptional EV deals remains open, at least in the near term. Those considering an electric vehicle should compare total out-of-pocket costs across manufacturers, as the combination of price cuts, cash incentives, and creative financing can result in savings that match or exceed the former federal tax credit.
The real test for the EV industry has begun: selling electric vehicles on merit and value rather than government incentives. Early evidence suggests that with competitive pricing and technological advantages, particularly in charging speed and range, consumers will continue embracing electric mobility.
The message is clear: the deals are still available, but they may not last forever as automakers balance market share ambitions against profitability pressures. For buyers ready to make the switch to electric, now could be an opportune moment.