For the past couple of years, the EV story has been a mix of momentum and growing pains.

Prices plummeted, supply chains stabilized, and adoption rates increased. However, the effects of these positives were more than offset by heightened interest rates, charging gaps, and stubborn affordability that continued to pressure demand. 

Now, to make matters even worse, the clock has run out on the EV sector’s biggest crutch in the federal EV tax credit. What began as an adoption tailwind has become a dividing line between brands with flexibility.

Here’s how the EV tax credit worked through September 30:

  • Federal credit: Up to $7,500 for new EVs and $4,000 for used ones, which expired on September 30, 2025, under the “One Big Beautiful Bill”.
  • IRS guidance: Buyers who inked a binding contract and made a payment (even a down payment) on or before that date can still claim the credit after delivery.
  • Automaker strategy: Captive finance arms used a lease pass-through in claiming credits, along with lower monthly payments.
  • Dealer workaround: Some have explored purchasing EVs from dealer inventory, and then leasing them back to customers to efficiently preserve eligibility.

With those windows closing, automakers are testing new playbooks. 

Legacy automaker General Motors has just made a monumental move that signals how quickly the EV industry’s confidence and strategy can evolve when government funding stops flowing.

A quick U-turn from GM tightens the road for EV customers

Automotive giant General Motors just walked back an EV promise in a move that’s likely to rattle its most loyal buyers. Following weeks of signaling support for customers who would lose out on the federal EV tax credit, GM has quietly pulled the plug.

GM’s latest EV move isn’t what buyers expected.

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Instead of extending the $7,500 credit through its dealers, the company will now fund its own $6,000 lease incentive through October 30, which is a significantly smaller cushion at a delicate time for EV adoption.

Moreover, the move comes at a time when there’s growing criticism from lawmakers who have accused GM and Ford of stretching IRS rules enabling buyers to lock in credits before September. 30. 

GM had reportedly crafted the program to cushion dealers from losing the $7,500 EV tax credit and help prevent inventory buildups. Also, it targeted nearly 20,000 EVs for the scheme, but later abandoned it after backlash from Senator Bernie Moreno of Ohio.

GM Financial had planned to purchase dealer EV inventory and claim the credits directly, passing those savings through to leases. That workaround has now been scrapped. The market punditry feels that GM’s retreat will pressure sales just as the market’s post-credit demand cools off.

Here’s where others stand:

  • Ford: Sets up a Ford Credit workaround through December 31; status unclear. 
  • Tesla: Raised lease prices across all models after the expiration. (Reuters)
  • Hyundai: Offering automaker-funded rebates of $7,500 off the 2025 Ioniq 5, up to $9,800 on 2026 trims.
  • Stellantis (Jeep/Dodge/Chrysler): Rolling out short-term rebates to effectively mimic the $7,500 credit.

Experts warn the EV boom just hit a speed bump

The end of the federal tax credit on September 30 is already reshaping the market, while resetting the math for buyers and automakers. Following a record September sprint for EV players, analysts feel a demand air pocket is forming.

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J.D. Power says EVs grabbed a record 12.2% of U.S. retail share in September, with shoppers rushing to qualify for the credit before the deadline. However, it’s important to consider that the pull-forward is leaving quieter order books behind. For instance, S&P Global Mobility flagged a similar pattern where a Q3 bump was followed by a Q4 dip.

Morgan Stanley’s Adam Jonas laid out a blunt verdict, saying that “Next year could be a pretty dreadful year for EVs in this country,” warning that affordability pressures will bite. Similarly, BloombergNEF projects a 24% year-over-year drop in U.S. plug-in sales in Q4, with 2026 expected to be mostly flat.

Automakers are of a similar opinion. 

Ford CEO Jim Farley feels the regulatory change is a “game-changer,” while Nissan Americas warned the near term could potentially end up being “super-brutal.” Rivian trimmed its 2025 delivery outlook, following the cutoff, and Tesla raised lease prices across all key models once credits vanished.

Cox Automotive now expects U.S. EV share to drop below 10% in 2025, rising only to 25% by 2030, down substantially from the 50% it once envisioned. 

As we look ahead, it’s plausible to assume leaner trims, led by automaker-funded rebates (such as Hyundai’s up to $10,000 cuts), and deeper lease subsidies until there’s greater clarity on scale and costs.

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