EV Sales Boom as Federal Tax Credit Set to Expire

Electric-vehicle sales in the United States are surging as the federal government’s $7,500 tax credit for EV purchases nears its expiration on September 30. Dealers across the country, particularly in electric-car hot spots like Colorado, are offering unprecedented lease deals to clear inventory, creating a last-minute buying frenzy among consumers.

At Emich Kia in Denver, shoppers can lease a Kia Niro EV for just $40 a month before taxes, while the larger EV6 is available for under $100 a month. Even the $65,000 three-row EV9 can be leased for $189 monthly. Colt Emich, the dealership’s general manager and a fourth-generation car salesman, described the deals as “unprecedented,” noting that they represent only a fraction of the vehicles’ sticker prices. Longtime EV owners, such as retired physician John McCabe, are taking advantage of these incentives to upgrade their electric vehicles before the tax credits disappear.

Will EV Sales Crater?

The upcoming expiration of the federal tax credit is reshaping the auto industry. Automakers that have relied on government incentives to boost EV sales are now preparing for a market without federal support. General Motors, for instance, temporarily laid off 360 employees at a Detroit plant to reduce production of the GMC Hummer EV and Cadillac Escalade IQ, citing inventory alignment.

Colorado has emerged as a leading market for EV sales, with electric vehicles making up nearly one in five new car registrations from April through June—more than double the national average. Popular models include the Nissan Ariya SUV, which has become a top seller in the state. Markus Kamm, director of sales at Tynan’s Nissan, noted that one out of every three Ariyas sold in the U.S. this year has been purchased in Colorado, where low-cost leases are attracting first-time EV buyers.

For many, the tax credits have made EV ownership feasible. Paul Ibarra, a 39-year-old bus driver, expressed excitement about finally being able to afford an electric vehicle due to the incentives. Industry experts highlight that state-level programs, combined with expanded fast-charging infrastructure, have also fueled adoption in Colorado, alleviating consumer concerns about range limitations.

There is Reason to be Optimistic

Despite the looming end of federal support, dealers are optimistic about the current sales surge. Research from J.D. Power indicates that the accelerated buying timeline could push EV retail share in the U.S. to a record high in August. One shopper, who recently purchased a Volvo C40, is now exploring additional EV options, with leases for models such as the Volkswagen ID.4 starting at $39 per month before taxes.

Dealers caution, however, that such deals may be short-lived. “We may never see this level of deal again,” said Kamm, emphasizing the unique nature of the current market as consumers rush to take advantage of federal incentives before they expire. Exactly how this all shakes out is still to be seen but suffice it to say that September will be a busy month at car dealers as smart consumers get in before the September 30th deadline.

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