Government tax credits for electric vehicles expired Oct. 1 after Congress voted to end the program years ahead of schedule.
The program, intended to boost production of electric vehicles made in the U.S., awarded $7,500 tax credits to individuals making less than $150,000 a year, or couples filing jointly who made up to $300,000 a year. The credits were expanded in 2022 under a Democratic-controlled Congress and signed by President Joe Biden.
The program was slated to run through 2032.
But with the program coming to an abrupt end, electric vehicle makers now have to decide how to price vehicles that had been sold with $7,500 subsidies.
Hyundai lowering prices
Hyundai said it will lower the MSRP of the Ioniq 5 by up to $10,000 for 2026 models and continue offering a $7,500 cash incentive for 2025 Ioniq 5 models. The base model of its Ioniq 5 will start at $35,000 in 2026, Hyundai said.
The 2025 Ioniq 5 base model is now priced at $42,600 MSRP.
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"Hyundai is taking bold steps to ensure our award-winning IONIQ 5 remains a top choice for EV buyers," said Randy Parker, president and CEO, Hyundai Motor North America. "This pricing realignment reflects our commitment to delivering exceptional technology and innovation without compromise."
EV sales expected to sag
Ford Motor Co. CEO Jim Farley told CNBC he expects demand for all-electric vehicles to be cut in half due to the loss of credits. He said customers are interested in EVs but are priced out of the vehicles.
“Customers are not interested in the $75,000 electric vehicle. They find them interesting. They’re fast, they’re efficient, you don’t go to the gas station, but they’re expensive,” Farley said.
Possible temporary workaround
Even though customers are unable to directly get $7,500 credits, Ford and GM are reportedly launching programs to extend the use of $7,500 tax credits for retail leases.
Reuters reported the automakers devised the program after consulting with the IRS.
GM has seen its EV sales skyrocket in recent months. The automaker announced Wednesday that EV sales for 2025 had already surpassed all of 2024. Still, EV sales accounted for less than 10% of GM's total deliveries in the third quarter of 2025, despite record-breaking numbers.
