by Caroline Petrou Cohen of the Los Angeles Times
Michael Buday has one eye on his calendar as he plans to buy a second-hand Tesla. Residents of Orange County, California, have been left for two months to take advantage of the federal tax credit, which saves thousands of dollars when buying an electric vehicle.
The federal government will stop paying $7,500 incentives for new electric vehicles and $4,000 in credits for used vehicles on September 30th. This is a sudden turnaround by the Trump administration of Biden-era efforts to address climate change emissions from gasoline vehicles. Details can be found in the “Big Beautiful Bill” passed this month.
Tax credits are available for plug-in cars, but there are also gas tanks such as the Toyota RAV4 Prime and Chrysler Pacifica Hybrid.
Transportation is the biggest contributor to climate change in both California and across the country, and experts say it has to be much cleaner to maintain a recognizable climate. According to the California Energy Commission, one in four cars sold in California are fully electric or plug-in hybrids.
The credit elimination is expected to further block EV sales, which are already slow amid interest in California and sudden car rates. Industry analysts and car dealers predict that interest in electric vehicles will skyrocket and that people will still be able to earn credit.
Buday, who wants to buy a second Tesla after buying the Model 3 two years ago, said he hopes to go ahead of the curve.
“People tend not to pay attention until they get close to deadlines,” Buday said. “There are hundreds of Teslas even within 60 miles for sale, but if we catch up with the fact that these credits are gone, I think we can hurry and snap them.”
The tax credits are applicable to most electric vehicles for sale, including SUVs and trucks on display at Camino Real Chevrolet in Monterey Park. Dealer president Rob Hernandez said he hasn’t seen a big jump in EV sales yet. He said the manufacturer is estimated to increase over the coming weeks.
Approximately 20% of the dealer’s total sales come from sales from electricity providers, including the popular Chevrolet Blazer and Equinox. Competition in the electric vehicle space is becoming more and more intense as big car manufacturers release their line of electric vehicles along with gas-powered cars, including Ford and Porsche. Electrical companies, including Rivian and Lucid, will further crowd the field of competitors.
Hernandez is helping him reduce sales at his dealerships at the expiration of the tax credit, but he said he is confident in Chevrolet’s foothold in California.
“We expect a spike, and we may have a lull after the EV credits expire,” Hernandez said. “Hopefully it’ll all be even.”
Tesla is trying to use credit expiration dates to motivate potential customers. I have a marketing email saying “Order to get $7,500 straight away.”
Tesla CEO Elon Musk said in a revenue call this month that credit removal could hurt sales for his company, leading to “some rough quarters.”
Electric vehicle leaders are turning their attention to robotics and autonomous driving technology as vehicle sales collapse. Tesla reported a 16% decline in car sales in the last quarter from the previous year.
News that credits are expired may also be drowned by the overall price volatility handled by consumers.
“Most people in this economy are reading the news and are struggling to make purchase decisions based on all these moving goals,” said Dominick Mishirandino, consumer behavior expert and CEO of Retail Tech Media Nexus.
“The average person is just trying to understand it all,” he said.
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Original issue: August 10th, 2025 9am EDT
