The key factor that nudged Dan McGrath and his wife to lease a Hyundai Ioniq 5 SUV in August was the impending end of a $7,500 federal tax credit available to people who get a new electric vehicle.
“We knew that with the Sept. 30 deadline, it was now or never, so we did it,” said McGrath, 38, who works as a transportation planner in Cincinnati. “The car became much more affordable with the tax credit.”
Across the country, thousands of people have been making the same calculation, leading to a surge of electric car sales. In August, sales jumped 18%, to 146,332 vehicles, and analysts expect another big increase in September.
But the demise of the tax credit will probably bring the party to an end. Sales of electric models are expected to plummet in the last three months of the year and then remain sluggish for some time.
“Next year could be a pretty dreadful year for EVs in this country,” Adam Jonas, who covers the auto industry at Morgan Stanley, said this month at a conference hosted by his firm.