EV market tightens with less than a week before federal tax credit ends

With five days left until a federal tax credit expires, the market for new and used electric vehicles is tightening.

Since July, when President Donald Trump signed the federal tax and spending bill that terminated the credit on Sept. 30, EV sales have been breaking records.

Here’s what you need to know.

What is the Clean Vehicle Tax Credit?

As part of the 2022 Inflation Reduction Act, consumers who buy a new plug-in electric or hydrogen fuel cell vehicle can claim up to $7,500 as a federal tax credit for the purchase. Consumers who buy a used clean vehicle for $25,000 or less from a licensed dealership are entitled to as much as $4,000 back on their purchase. The credit was intended to spur EV adoption by offsetting the vehicles’ higher price compared with gas-powered models.

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