Congress passed a tax and spending cut bill on July 3, 2025, that ends federal tax incentives for electric vehicles (EVs). The $7,500 federal tax credit for new EV purchases, as well as the $4,000 credit for used EVs, will expire on September 30, 2025, with buyers needing to take delivery by that date to qualify. This move accelerates the sunset of the EV tax credit by more than seven years compared to prior expectations. Automakers and dealerships are actively promoting EV sales to reduce inventory levels, which currently exceed 90 days of supply, before the credit expires. Tesla, among others, has displayed prominent notices about the credit's impending end. The expiration is expected to increase the cost of buying electric vehicles, prompting some consumers to consider used EVs as an alternative. Meanwhile, despite tariffs on Chinese goods implemented earlier in 2025, car prices have remained stable for now, though experts warn of potential price volatility in the near term. The combination of the tax credit expiration and tariff impacts could lead to a spike and subsequent collapse in U.S. EV sales. President Donald Trump's administration is credited with the legislation ending the EV tax incentives.