Surge in Electric Vehicle Sales as Tax Credit Deadline Approaches

Electric vehicle (EV) sales are experiencing a notable surge as consumers rush to take advantage of a significant federal tax credit that expires soon. At the Orange County Auto Show, which opened on July 27 and runs through July 30, potential buyers flocked to test drive the latest electric models, including the Ford Mustang Mach-E. Retired resident Corinne Lawson expressed her enthusiasm as she considers purchasing her fourth Mustang, this time opting for an all-electric version. “It has a backseat for the grandkids,” she noted, highlighting the vehicle’s family-friendly features.

Interest in EVs has surged following an announcement from the Trump administration regarding the expiration of the tax credit. Buyers have only days left to secure a credit of $7,500 on new electric vehicles and $4,000 on used models, with the deadline set for July 31, 2023. In response to the impending cutoff, auto dealers are reporting an increase in sales. “We’re seeing a big spike in EV sales,” said John Sackrison, executive director of the Orange County Automobile Dealers Association.

The statistics reflect this trend. In May, about 21% of new vehicles sold in Orange County were all-electric. By June, that number had risen to 25%, and it further increased to 32% in July. Nationally, sales of new EVs rose by 19% in July compared to the previous year, according to Cox Automotive. Analysts at J.D. Power predict that EV sales could account for more than 12% of overall car sales in the United States this month.

The rush to purchase EVs is also influenced by the rising costs of vehicles and parts due to tariffs imposed by the Trump administration on key trading partners. At Cadillac of Beverly Hills, electric vehicles now represent approximately two-thirds of new vehicle sales. Product specialist Naeim Nastar remarked on the “significant increase” in sales over the past few months, attributing it largely to the tax credit. “Most people who come in now are here to take advantage of the tax credit for electric,” he noted.

Dealerships are actively promoting their electric models as the deadline approaches. For instance, Ocean Cadillac in Miami recently posted an advertisement on social media urging consumers not to miss out on the tax credit. The advertisement emphasized, “Don’t miss out — the $7,500 EV Tax Credit ends this month!”

At the Orange County Auto Show, attendees explored various electric options, including Cadillac’s electric Lyriq SUV, and engaged with sales representatives to learn more about vehicle features. One attendee, who preferred to be identified only as R.J., expressed interest in the Lyriq, as well as models from BMW and Kia. “I was hoping to get that $7,500 credit,” she said, acknowledging the urgency of making a decision before the tax incentive expires.

Despite the current buying frenzy, analysts caution that this spike in sales may not be sustainable. Thomas King, president of the data and analytics division at J.D. Power, predicted a significant decline in EV sales for October. “The effect on sales will shift from positive to negative,” he stated, citing both the expiration of the federal tax credit and the anticipated adjustment period following the accelerated purchases made during the summer.

Some potential buyers are now reconsidering their options due to the end of the tax credit. Long Beach retirees Stacey and Jim Palma were initially excited about purchasing their first electric vehicle but have since shifted their focus to more affordable hybrid options. “We’re backing out a little because the rebates are going away,” Jim explained. “Our incomes are limited, and the incentive is not going to be there anymore.”

As the deadline looms, the landscape for electric vehicle purchases continues to evolve, with consumers weighing the benefits of going green against the changing financial incentives.