The federal EV purchase tax credit of up to $7,500 ended on September 30, 2025, eliminated by the One Big Beautiful Bill Act. State and local incentive programs remain active across the country, though, and are now the primary source of EV purchase savings for most buyers.
What changed at the federal level
Before October 2025, the federal government offered two purchase credits: up to $7,500 for new EVs and up to $4,000 for qualifying used EVs, both applied directly at the dealership in most cases. Both ended for vehicles acquired after September 30, 2025. In their place, a new federal auto loan interest deduction now applies to financed purchases of U.S.-assembled vehicles, a different kind of benefit that works alongside state programs rather than replacing them. Our post on the new EV loan interest deduction covers how that actually works.
What’s still on the table
| Then (before Oct 2025) | Now |
|---|---|
| Federal purchase credit, up to $7,500 | Ended |
| Federal used EV credit, up to $4,000 | Ended |
| State tax credits and rebates | Still active, vary by state |
| Utility rebates and incentives | Still active, unaffected by federal change |
| Auto loan interest deduction | New, replaces the old purchase credit for financed buyers |
What state and local programs typically include
Available programs vary widely by state and can include state tax credits, rebates, utility incentives, reduced registration fees, and HOV lane access. Some programs are income-qualified, offering larger rebates to buyers below a certain income threshold, and a few can be combined with a gas-car trade-in for an additional incentive. Our post on state-level EV incentives breaks these categories down individually.
Buying versus leasing changes the picture too
Incentive eligibility isn’t identical for a purchase and a lease, since leased vehicles used to have access to a separate commercial credit pathway that also ended in the same legislation. Our post on whether leasing qualifies differently than buying covers what changed there specifically.
💡 Tip: Find programs available in your state using our EV Incentives page, updated daily from the U.S. Alternative Fuels Data Center.