North Bay woman buys electric car before federal tax credit expires

By CBS Bay Area

Kathy Horan hadn’t bought a new car in 13 years, until today.

The longtime North Bay resident traded in her hybrid for a fully electric vehicle. The reason: a federal incentive that helps lower the cost of EVs is about to run out.

“As soon as they started cutting down, I said, ‘Well, there is my timeframe. I’m going to get it before the end of September,’ ” Horan said.

The federal EV tax credit was introduced in 2022 under President Biden’s Inflation Reduction Act. It offered buyers up to $7,500 off a new EV and $4,000 off a used one. But under legislation from the Trump administration, that credit expires September 30.

Dealers say the looming deadline has been driving sales.

“Oh, my goodness. Yes, we are working overtime these past few weeks with the tax credit running out. A lot of folks have questions and we have the answer,” said David Shapiro with Cartelligent.

But starting October 1, EV shoppers shouldn’t expect help from California to make up the difference.

While in San Francisco last week, Gov. Gavin Newsom, an outspoken supporter of electric vehicles, said the state won’t replace the federal credit with its own rebate program.

“We can’t make up for federal vandalism of those tax credits, but we can continue to make the unprecedented investments in infrastructure which we’re doing,” Newsom said.

So how much will the market be impacted?

Economist Patrick Anderson believes the effect will be noticeable, but not catastrophic.

“They can’t fall off a cliff because they’re not very high. They’re going to fall off a small hill because that’s as high as they got,” Anderson said.

For Horan, though, the timing couldn’t have been better. She left the dealership on Thursday with the keys to a brand-new EV, just before the deal disappeared.