As US tax credit ends today, EVs face a ‘pretty dreadful year’

The key factor that nudged Dan McGrath and his wife to lease a Hyundai Ioniq 5 sport-utility vehicle in August was the impending end of a $7,500 (about 241,800 baht) federal tax credit available to people who get a new electric vehicle.

- NEAL E. BOUDETTE

A Tesla dealership in Mill Valley, California. Electric vehicle sales are expected to plummet in the US as a result of policy changes made by President Trump and Republicans in Congress, who have long opposed subsidies.

(NYT)

"We knew that with the Sept 30 deadline, it was now or never, so we did it," said Mr McGrath, 38, who works as a transportation planner in Cincinnati. “The car became much more affordable with the tax credit.”

Across the country, thousands of people have been making the same calculation, leading to a surge of electric car sales. In August, sales jumped 18%, to 146,332 vehicles, and analysts expect another big increase in September.

But the demise of the tax credit will probably bring the party to an end. Sales of electric models are expected to plummet in the last three months of the year and then remain sluggish for some time.

"Next year could be a pretty dreadful year for EVs in this country," Adam Jonas, who covers the auto industry at Morgan Stanley, said earlier this month at a conference hosted by his firm.

Bracing for this new environment, automakers are slowing production of battery-powered cars, delaying or scrapping new models and shifting capital and other resources into petrol and hybrid electric vehicles.

It all marks a stark turnaround from the heady days a few years ago when many automakers believed electric vehicles were poised to take off.