Introduction If you're considering buying a new electric vehicle (EV), 2025 might be the perfect year. Thanks to overlapping tax credits from both President Joe Biden's and former President Donald Trump's administrations, Americans could save thousands on a new car — but only if they act fast. Here's how you can take advantage of both sets of incentives before the window closes on September 30, 2025.
Understanding the Tax Credits
1. Biden's Inflation Reduction Act (2022): Under Biden's EV-friendly policy, consumers can receive a federal tax credit of up to $7,500 on new, qualified plug-in electric or fuel-cell vehicles. However, this incentive will expire on September 30, 2025, as per revisions introduced in Trump’s new legislation.
2. Trump’s "Big Beautiful Bill" (2025): Signed in January 2025, Trump’s new law offers an additional $10,000 in tax credits on the interest of auto loans for EVs that weigh less than 14,000 pounds and are assembled in the U.S. This credit applies to purchases made between 2025 and 2028.
Stacking the Savings By combining both credits, eligible buyers could receive up to $17,500 in total savings, depending on the cost and financing structure of the vehicle.
Example:
Average EV cost: $57,734
Biden tax credit: -$7,500
Trump tax deduction (on interest): varies by year (e.g. $2,114 in 2026)
Graphic 1: Tax Credit Timeline
Graphic 2: Average Prices and Credit Comparison
Considerations and Limitations
Income Caps:
Biden's plan: Max $150,000 for individuals, $300,000 for joint filers.
Trump's plan: Phases out at $150,000 for individuals and $250,000 for joint filers.
Eligibility:
Vehicle must be assembled in North America.
Used EVs don’t qualify for Trump’s tax credit, although Biden's offers a $4,000 credit for them.
Commercial fleet and leased vehicles are not eligible under Trump’s bill.
Graphic 3: Interest Deduction by Year
Should You Buy an EV Now? Despite high sticker prices, electric vehicles can save you money in the long term. According to Kelley Blue Book:
Five-year fuel cost for gas vehicles: $9,490
Five-year fuel cost for EVs: $4,295
Even if the tax credits don’t offset the entire price difference, the long-term savings and incentives make EVs a worthy investment in 2025.
Conclusion If you’re in the market for an EV, there’s never been a better time. The ability to stack Biden's and Trump's tax credits creates a unique opportunity to drive away with a brand-new vehicle and thousands in savings. Act before September 30, 2025 to maximize your benefits!
Tip: Consult with a tax advisor to ensure you qualify for both incentives before making your purchase.
0 Comments