Automakers extend EV discounts after federal subsidy expires

[Skye Jacobs]

In a nutshell: As the policy environment shifts, the scramble to sustain discounts underscores the fragile position of electric vehicles in the US market. High prices and charging concerns continue to weigh on adoption, even as other regions move more aggressively toward electrification. Automakers are responding by relying on lease structures, direct rebates, and shifts in hybrid production in an effort to preserve sales and navigate an uncertain market trajectory.

Automakers are moving quickly to extend discounts on electric vehicles following the expiration of a federal subsidy, underscoring the challenges manufacturers face in sustaining momentum in the volatile US market.

The $7,500 federal tax credit for EVs, which helped drive a wave of third-quarter sales, expired on Sept. 30. In its absence, companies including General Motors, Ford, Hyundai, and Jeep-maker Stellantis are stepping in with incentives of their own.

GM, Ford, and Stellantis are maintaining the $7,500 benefit on certain leased models – limited to vehicles already in transit or on dealer lots – by carrying forward credits they secured before the policy ended. Hyundai has taken a broader approach, offering $7,500 in cash on its 2025 Ioniq 5 and cutting sticker prices on the 2026 model by as much as $9,800, depending on the trim.

The industry is bracing for a slowdown as President Donald Trump's policy shifts signal a reduced federal role in promoting electric vehicles. In response, automakers are recalibrating their strategies to place greater emphasis on hybrids and traditional gas-powered models.

Ford CEO Jim Farley warned this week at an industry gathering in Detroit that the impact could be significant. "I wouldn't be surprised if EV sales in the US go down to five percent," he said, down from roughly 10 percent today, adding that the market will be "way smaller than we thought."

Tariffs imposed by the Trump administration are further straining profitability. Under trade agreements finalized this summer, tariffs add about $5,500 to the cost of an imported vehicle and roughly $1,000 to US-built cars that rely on imported parts, according to researcher Cox Automotive. These costs add to the pressure automakers face as they try to keep EVs competitive at a time of slowing demand.

Forecasts show diverging global trends. A September outlook from EY projects US EV sales will rise only slightly, reaching about 11 percent of the domestic vehicle market by 2029, up from 8.1 percent last year. By contrast, the consultancy expects Europe to surpass 50 percent EV penetration by 2032, with China crossing that threshold a year later.

Automakers are adapting their strategies in response. Hyundai is reconfiguring its $5.5 billion plant in Savannah, Georgia, to produce hybrids alongside EVs while continuing to bet on long-term demand.

Randy Parker, head of Hyundai's North American operations, told reporters this week that the company anticipates some turbulence following the subsidy's expiration but remains optimistic.

"I do believe because of the surge we saw in September, there's going to be a reset in October, maybe November. But the EV market will settle," Parker said.

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Automakers extend EV discounts after federal subsidy expires

 

[Theinsanegamer]

Interesting...almost like funding things with taxpayer money just inflate their real world costs.....

 

[Impudicus]

Interesting...almost like funding things with taxpayer money just inflate their real world costs.....

Why I am paying money for a company to build cars for someone else in the first place? Plus, I remember this whole used battery disposal crisis that was destroying the environment, so now they want more batteries?

 

[yRaz]

Automakers have massively inflated prices while also posting record profits. We aren't in the COVID free money era anymore, they need to make adjustments. It's not an EV, but I saw a 4 cylinder mustang the other day going for $40,000. These prices are silly and the markets can't afford this price gouging anymore.

 

[Theinsanegamer]

Automakers have massively inflated prices while also posting record profits. We aren't in the COVID free money era anymore, they need to make adjustments. It's not an EV, but I saw a 4 cylinder mustang the other day going for $40,000. These prices are silly and the markets can't afford this price gouging anymore.

Dont forget the de-contenting. The Ford Maverick has seen gigantic price jumps. A fully loaded Lariat model went from $31k to $43k in 3 years, and you lost the heated windshield wiper parts (pretty big issue since the Maverick hood obscures the wipers so you cant lift them off the glass), the 4 way adjustable headrest, the temperature display in the dials, the wired keypad for door unlocks, the 2025 model nixed all the physical HVAC controls, and on the 26 models now wireless charging is not included in the lux package but is a separate feature.

Mazda is replacing the nice button layout with cheap click wheels, VW moved to HAPTIC CONTROL WHY?!?, RAM limited their lumbar to 2 way instead of 4 way while removing some physical controls and oil dipsticks, the list goes on.

We are paying way more then even before, and getting far less. Honda mostly still has their head screwed on straight, but even they went to an 8 way seat instead of a 10 way making all their cars a no go for me.

 

[Jrfeimst2]

Interesting...almost like funding things with taxpayer money just inflate their real world costs.....

Big Oil gets billions in subsidies, taxpayer money, to keep gas prices cheap. I don’t want to drive a nasty gas car. Why do I have to use my tax money to Subsidize a dying industry?

 

[Plutoisaplanet]

As I've stated before, these automakers have been offering massive discounts to clear out inventory because they plan to significantly reduce production and discontinue EVs. This month alone, cancelations include the Nissan Ariya, Acura ZDX, Dodge Charger Bashee EV, Ram pickup EV, Bentley, and Porsche.

Few automakers still plan to maintain or increase their EV production in the US, despite the 15 year long claim that other automakers would usurp Tesla's lead. Meanwhile, Tesla didn't even offer any steep discounts and sold 500k EVs this quarter (see discount history). As a result of the EV rebate cancelation, Elon Musk announced Tesla will produce a lower priced Model Y in Q4 (no discounts needed): https://www.fool.com/earnings/call-...ffordable models available for everyone in Q4.

 

[Theinsanegamer]

Big Oil gets billions in subsidies, taxpayer money, to keep gas prices cheap. I don’t want to drive a nasty gas car. Why do I have to use my tax money to Subsidize a dying industry?

Because the industry isnt dying. If you engage your brain, you will realize that petroleum products are in every aspect of your life. From plastics to additives to stabilizers and cleaners. They power the ships that float your wares across the oceans and the trains that roll the cargo across the desert and the trucks that deliver to the warehouses and stores.

Even your "squeaky clean EV" is powered by petroleum. What do you think runs your electric grid. Where do you think the material for your "synthetic vegan leather" comes from? How about the polymers for your door handles, your windows, and your interior panels?

And you could STILL make an argument that subsidies only raise the price on petroleum. Why do you have to subsidize it? Because your politicians love wasting your tax dollars. Welcome to the party of "why are my taxes paying for garbage" and enjoy your stay.

As I've stated before, these automakers have been offering massive discounts to clear out inventory because they plan to significantly reduce production and discontinue EVs. This month alone, cancelations include the Nissan Ariya, Acura ZDX, Dodge Charger Bashee EV, Ram pickup EV, Bentley, and Porsche.

Few automakers still plan to maintain or increase their EV production in the US, despite the 15 year long claim that other automakers would usurp Tesla's lead. Meanwhile, Tesla didn't even offer any steep discounts and sold 500k EVs this quarter (see discount history). As a result of the EV rebate cancelation, Elon Musk announced Tesla will produce a lower priced Model Y in Q4 (no discounts needed): https://www.fool.com/earnings/call-...ffordable models available for everyone in Q4.

The first model was a low volume product imported from Japan. Nissan is pouring the money from the ariya into the next Leaf instead and isnt exiting the EV industry. They are part of Stellantis, which is cutting across the board due to severe budgeting issues, not a lack of interest in EVs.

The second was the abomination that was the honda/GM joint project, and sales of that fell apart because GM's software SUCKS ARSE.

The Daytona and ram 1500 are both Stellantis products (like the nissan aryia). The Charger EV was a monumental failure, not because it was an EV, but because IT SUCKS ARSE. The range is abysmal, its efficiency is worse then the 10,000 lbs humer EV, and the thing is HUGE. Half a foot wider the a full size truck. Meanwhile the ram 1500 would have been another $100k truck launching into a sea of underselling 100k trucks. The market for expensive vehicles of all stripes, not just EVs, is falling out.

Porche and Bently are not eliminating EVs, they are maining their IC Edevelopment into the next decade instead of cutting them out now, which is a sensible decision.

As you pointed out, Tesla, the one US automaker making reasonably priced EVs, has had no issues maintaining sales, despite the whining of Redditors. Kia/Hyundai have also seen great EV sales from the EVx and Ioniq lines, and are planning on expansion.

Seems to me if you rcar is reasonably priced and doesnt SUCK ARSE, there are no issues, EV or not.

 

[toooooot]

The idea was that subsidies will spike interest and help start the industry. But how long do we need to pour taxpayer money into it, 10 more years? 30?
They should continue to receive subsidies when they reach certain goals that would make EVs a bit better and cheaper.
How long do they need is my question.

 

[Plutoisaplanet]

The idea was that subsidies will spike interest and help start the industry. But how long do we need to pour taxpayer money into it, 10 more years? 30?
They should continue to receive subsidies when they reach certain goals that would make EVs a bit better and cheaper.
How long do they need is my question.

I think 17 years was long enough. EVs are not something new anymore. As others have pointed out, there are some countries where over 50% of new vehicle sales are for EVs. With over 1 million EVs sold in the US every year, that's $10B of annual subsidies we just don't need. Now lets cut other subsidies where it makes sense so the federal government is funded by taxes more than unsustainable debt.

 

[SRB]

Automakers have massively inflated prices while also posting record profits. We aren't in the COVID free money era anymore, they need to make adjustments. It's not an EV, but I saw a 4 cylinder mustang the other day going for $40,000. These prices are silly and the markets can't afford this price gouging anymore.

That's easy. Ford takes a hit in excess of $40,000 or more on every EV they sell. Last year, they lost $5.5 billion in their freshly minted "EV division". It's probably why they don't sell cars anymore. How are they going to make commuter and entry level cars when you can't mark them up through the roof to pay for this EV boondoggle. I doubt it's much better for the rest, it's just that Ford went all in in a way no one else did. And that's after scrapping the Mustang platform completely. The current Mustang is built off of the Explorer chassis to save money. Like I said, no money in cars.

There's a reason Tesla never came out with their "under $30,000" model...It can't be done and make a profit.

Ford Lost $130,000 on Every EV It Sold in the First Quarter

The Blue Oval reported an 84 percent drop in revenue in its Model e electric division.

www.caranddriver.com

 

[SRB]

Big Oil gets billions in subsidies, taxpayer money, to keep gas prices cheap. I don’t want to drive a nasty gas car. Why do I have to use my tax money to Subsidize a dying industry?

LOL, this myth is so old it has a long beard. While oil companies do get investment and equipment tax breaks, that number pales in comparison in the amount of taxes and regulation (fees, permits, unique taxes) they send to state and federal governments. Remember, certain states have already floated changing from a gas tax to a mileage tax due to increasing fuel economy (lower fuel sales) and EV's they feel rip off the government since they don't pay the highway taxes.

Trade the "subsidies" for the government gouging they get and see how that goes.

 

[SRB]

I think 17 years was long enough. EVs are not something new anymore. As others have pointed out, there are some countries where over 50% of new vehicle sales are for EVs. With over 1 million EVs sold in the US every year, that's $10B of annual subsidies we just don't need. Now lets cut other subsidies where it makes sense so the federal government is funded by taxes more than unsustainable debt.

Don't forget, in Europe, the cities are much closer to each other. It's not like the U.S., where it's not unusal to have to drive 3-4 hours to get to the next major city. A real world test drive by The Detroit News had a F-150 lignting take a test drive from Detroit to a lake cabin 4 hours to the north. It took 2 hours longer by EV (with 45 min of that attributed to construction), had to drive some distance out of the way because the first charger they stopped at was not working.

They also have fuel prices considerably higher than the U.S., making the EV's much less painful to buy and operate.

 

[Str8Shot]

Automakers have massively inflated prices while also posting record profits. We aren't in the COVID free money era anymore, they need to make adjustments. It's not an EV, but I saw a 4 cylinder mustang the other day going for $40,000. These prices are silly and the markets can't afford this price gouging anymore.

So long as these prices find buyers, prices won’t come down. The old historical phenomenon for inflation: the cure for high prices, are high prices, no longer applies. Apparently enough people are willing to pay for stuff regardless of cost.

 

[scoffer]

Subsidies wouldn't be necessary if automakers didn't insist on price-gouging.

 

[SRB]

Subsidies wouldn't be necessary if automakers didn't insist on price-gouging.

Cars would be affordable if the manufactures didn't have to jump through governmet and well funded special interest groups demands. God forbid the market actually decide.

 

[yRaz]

So long as these prices find buyers, prices won’t come down. The old historical phenomenon for inflation: the cure for high prices, are high prices, no longer applies. Apparently enough people are willing to pay for stuff regardless of cost.

I actually like the idea of an EV, I just haven't found one I really like yet. I do plan on adding an EV to my garage in the next few years but they all throw the fact that they're electric in your face every chance they get. Give me a normal car that just happens to be electric, I think that right there would take away most of the stigma. They want to look and act like the future, though. Just give me something that looks and acts like a regular car, but I very much would like an electric SUV that is some middle ground between my work truck and my old S-class.

I guess Americans keep buying them so they keep finding a price, as you said. But in the US, EVs are around 25% more expensive than they are in other countries

 

[wiyosaya]

Why I am paying money for a company to build cars for someone else in the first place? Plus, I remember this whole used battery disposal crisis that was destroying the environment, so now they want more batteries?

Why am I paying for petroleum products that I could care less about and that pollute the environment, including the air I breathe, don't bio-degrade, and potentially pollute the environment for thousands of years plus infiltrate my body and the bodies of my food? So now, they want to pump more money into known pollution producing petroleum products?

LOL, this myth is so old it has a long beard. While oil companies do get investment and equipment tax breaks, that number pales in comparison in the amount of taxes and regulation (fees, permits, unique taxes) they send to state and federal governments. Remember, certain states have already floated changing from a gas tax to a mileage tax due to increasing fuel economy (lower fuel sales) and EV's they feel rip off the government since they don't pay the highway taxes.

Trade the "subsidies" for the government gouging they get and see how that goes.

This comment is severely disconnected from reality.

There's a reason Tesla never came out with their "under $30,000" model...It can't be done and make a profit.

Bullcrap. The only reason is fElon.

 

[axiomatic13]

The petroleum cheerleading squad here out in force performing their favorite routine for us all. The Dunning-Kruger pyramid! Everyone applaud!

 

[James321]

Just shows how the car industry has been taking everyone for a ride all along.

Then they cry when China release cars for cheaper, because why?

 

[yRaz]

The petroleum cheerleading squad here out in force performing their favorite routine for us all. The Dunning-Kruger pyramid! Everyone applaud!

The problem with EVs is that they don't want to make a compelling product. If you look at China that has over 50% market penetration of EVs, they have lots of very compelling EVs. American EVs suck and if you can't charge at home, it's far more expensive to fuel an EV than an ICE car. Manufacturers lobbies to ban Cinese EVs in the US saying they are going to spy on us. Modern cars are already spying on us and selling our information to insurance companies and governments about where we're going and our driving habits, so that's kind of a moot point.

I say bring on the $15,000 Chinese EVs of I'm going to be spied on anyway.