Understanding 2025 EV Tax Credit Changes
2025 EV Tax Credit Changes Explained for Dover Drivers
Understanding Shifts Before They Take Effect
The landscape of electric vehicle incentives is shifting dramatically in 2025, and for many shoppers in New Hampshire, the clock is already ticking. Federal tax credits that once provided thousands of dollars in savings on new and used EVs are reaching their sunset, with key provisions expiring as soon as September 30. For Dover Honda customers weighing the move to an EV, understanding what remains available, what is disappearing, and how new legislation has reshaped the timeline is essential to making a confident purchase decision this year.
The Federal Credit for New EVs Ends
Through September 30, 2025, eligible buyers can still receive up to $7,500 off the purchase of a qualifying new electric vehicle. To take advantage, a binding purchase agreement must be signed-including a deposit-before the deadline. Even if your vehicle is delivered later, this documentation secures the credit. After September 30, however, the new vehicle incentive is gone, increasing the effective cost of EV ownership.
Pre-Owned EV Credit Expires as Well
The used EV market also loses its federal support in 2025. The incentive-worth up to 30 percent of the sale price, capped at $4,000-applies to used EVs at least two years old, sold for $25,000 or less, and purchased from a licensed dealership. This credit has made EV ownership accessible for more households, but it too will vanish after September 30. For budget-minded buyers, the next few months represent the last opportunity to leverage federal support for a pre-owned model.
The Role of OBBA
The One Big Beautiful Bill Act, signed into law on July 4, 2025, set the accelerated timeline for these changes. OBBA not only terminates the credits for new and used EVs, it also removes the leasing credit mechanism that allowed consumers to indirectly receive incentives through their lease agreements. This shift significantly narrows the window of opportunity and underscores the importance of acting before the end of September.
Current Eligibility Rules Until Deadline
While the credits remain in effect, the established criteria still govern which vehicles and buyers qualify. New EVs must be assembled in North America, meet sourcing requirements for minerals and battery components, and adhere to MSRP limits-$55,000 for cars, $80,000 for SUVs and trucks. Income caps apply as well: $150,000 for single filers, $225,000 for heads of household, and $300,000 for joint filers.
For used EV credits, stricter rules apply. The vehicle must be sold under the $25,000 threshold, meet the two-year age requirement, and be purchased from a dealer. Lower income caps apply to ensure the credit reaches middle-income households. Each credit is limited to one per taxpayer per year.
Since early 2024, credits have been applied either as a point-of-sale discount or later through filing IRS Form 8936. Both methods remain valid until the September 30 cutoff.
Why Timing Is Critical
With the expiration date approaching, the urgency is real. Once the credits are gone, EV prices will effectively rise, and analysts predict a slowdown in affordability and fewer dealer incentives to offset the loss. Acting now ensures you maximize available benefits, avoid higher effective costs, and take advantage of the final round of federal support before it disappears.
At a Glance: What's Changing
- Federal credit of up to $7,500 on new EVs ends September 30, 2025
- Credit of up to $4,000 on qualifying used EVs ends the same day
- The leasing loophole that passed incentives to lessees has been closed
- Current requirements (assembly, sourcing, MSRP limits, income thresholds) remain in effect until the cutoff
- Credits can still be applied at the point of sale or through tax filing up to September 30
Final Thoughts from Dover Honda
The EV market is entering a new chapter, and for buyers in the Seacoast region, the next few months are crucial. Whether you are considering a new EV with the full $7,500 credit or exploring a used option with the $4,000 benefit, September 30 marks the end of these valuable programs. At Dover Honda, our team is ready to help you navigate these changes, identify eligible vehicles, and secure your purchase in time to capture the final round of federal savings. Contact us today to explore available models and ensure you make the most of the 2025 EV tax credits before they're gone.
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1 Dover Point Rd
Dover, NH 03820
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