The Clock is Ticking: Clean Vehicle Credits Expire September 30, 2025
For years, federal clean vehicle credits have helped make electric vehicles (EVs), plug-in hybrids, and fuel-cell cars more affordable. But under the recently passed Opportunity to Build a Better Bottom Line Act (OBBBA), those credits are set to expire much earlier than originally planned.
Here’s what you need to know before the window closes.
What Is the Clean Vehicle Credit?
The Clean Vehicle Credit (Internal Revenue Code § 30D) currently offers up to $7,500 on qualifying new EVs and plug-in hybrids. The credit is split into two parts:
$3,750 if the vehicle meets critical mineral sourcing requirements.
$3,750 if the vehicle meets battery component requirements.
Income caps, MSRP limits ($55,000 for cars, $80,000 for SUVs/trucks/vans), and final assembly rules also apply.
There’s also a Used Clean Vehicle Credit (up to $4,000) and a Commercial Clean Vehicle Credit for businesses.
When Do the Credits Expire?
All three federal clean vehicle credits — new, used, and commercial — will end on September 30, 2025.
That’s nearly seven years earlier than the original 2032 expiration set under the Inflation Reduction Act.
Why It Matters
EV affordability: The credits have been a key way for families to offset the higher upfront cost of clean vehicles. Their early sunset could put EVs out of reach for some buyers.
Market behavior: Expect a rush of purchases before September 2025, followed by a likely dip in EV sales once the credits disappear.
Planning window: If you were waiting for 2026 models, you may miss out on thousands of dollars in tax savings.
What You Should Do Now
Plan your purchase timeline — If you’re considering an EV or plug-in hybrid, look to buy or enter a binding contract before September 30, 2025.
Confirm eligibility — Not every vehicle qualifies. Check MSRP, assembly location, and whether it meets mineral/battery sourcing rules.
Keep documentation — Dealers must provide a “time of sale report” to certify eligibility.
Bottom Line
The expiration of clean vehicle credits under the OBBBA is a turning point for consumers, businesses, and the EV industry as a whole. If you want to take advantage, the deadline is firm: September 30, 2025. After that, unless new legislation is passed, these federal tax incentives are gone.
