- Electric vehicle buyers rushed to claim the federal clean vehicle credit in July, according to car research firm Edmunds.
- The upcoming Labor Day weekend could be among the best windows to drive home an EV.
- Many buyers are still unaware that affordable lease deals even exist.
Electric vehicle leasing hit the stratosphere in July, thanks to a growing number of car buyers who scrambled to claim the federal tax credit ahead of its Sept. 30 demise.
Leasing accounted for 70% of EV transactions in July, compared to just 10% in 2022, analysts from the car-buying website Edmunds said Wednesday. That’s slightly below last year’s record high of 80%, but still underscores that shoppers are racing to grab the up-to-$7,500 incentive while they can. And they’re going the leasing route for that.
Purchasing an EV outright allows you to claim the tax credit on a limited number of EVs, which InsideEVs has listed here. These EVs have to meet strict critical mineral sourcing requirements for the high-voltage battery and are subject to individual income limits. The so-called leasing loophole, by contrast, allows customers to claim the credit regardless of where the car or its battery is made.
Photo by: Motor1.com
Now the Trump administration’s One Big Beautiful Bill has axed both the tax credit and the leasing loophole. With that Sept. 30 deadline in mind, the EV consideration rate among new car shoppers also peaked in July at 17.10%, dropping slightly to 16.2% for the week ending August 24, Edmunds said.
“With the credit set to expire on Sept. 30, automakers are highly motivated to capture as many lessees as possible now—not just to move inventory, but to win over first-time EV shoppers and keep them coming back as EV adoption grows,” Jessica Caldwell, head of insights at Edmunds, said in a note.
“The reality is that EV leases are the hottest deal of the summer for car shoppers—and by the time September ends, they’ll be far harder to find,” she added.
Photo by: Hyundai
Caldwell makes an important point there. EV buyers rarely go back to driving gasoline-powered cars. That means every customer who makes the switch before incentives disappear is a long-term win for automakers. They are, after all, pouring billions into new plants, new models and U.S.-made batteries. The drivers who go electric today are likely to stick around and return for the next wave of more compelling EVs.
As InsideEVs’ monthly lease report shows, the leasing offers are aggressive. Hyundai is offering the Ioniq 5 crossover for $149 per month for 24 months with $5,000 due at signing. The Chevy Equinox EV is available for $249 per month for 24 months with $3,000 due at signing. Lucid and Polestar have been offering thousands of dollars in discounts to lure in Tesla customers.
But as Caldwell points out, many buyers are still unaware that such great deals even exist. “EVs fundamentally face an awareness issue, and if dealers and automakers don’t get the word out, they risk disappointing customers who show up after Sept. 30 only to find that the opportunity has passed,” she said.
Now, the upcoming Labor Day weekend might be the best window to snag the best possible deal on an EV. The IRS also issued updated guidance on the tax credit recently, confirming that any binding contract signed by Sept. 30 will qualify for the tax credit, even if delivery happens at a later date. Buyers don’t need to drive the car home before the end of September, but just have the paperwork signed and money down.
Still, Edmunds doesn’t advise procrastinating till the last minute.
“If you’re considering an EV, this is the best opportunity to make the move,” said Joseph Yoon, consumers’ insights analyst at Edmunds. He said that will allow buyers to track down the right model, give them ample time to expand their search beyond local dealerships and even inquire about upcoming shipments.
“Starting early gives you the best chance to get a contract in place before the deadline,” Yoon added.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
