DENVER — The federal tax credit to buy electric vehicles officially expires Tuesday, an anticipated change under the federal spending and tax bill signed by President Donald Trump.
That means after Tuesday, people can no longer use a $7,500 federal tax credit to buy an EV.
Up until now, The Colorado Automobile Dealers Association (CADA) said there was more of a rush to buy EVs before the deadline, but sales are expected to decline. Despite that, CADA CEO Matthew Groves said Colorado is still expected to remain ahead of others when it comes to EV sales.
"We were at 25% where most of the states around us are at six or seven. So we've got a ways to fall," Groves said.
As for what comes next, Groves thinks dealerships and manufacturers could offer deals to make up the difference, but he said it won't happen right away. He advised watching for changes, starting in about a month.
Groves also said manufacturers are already showing signs of changing their strategy over the next several years.
"Manufacturers are changing their strategy and redirecting a little bit from pure battery electric towards a traditional hybrid vehicle," he said.
"Traditional hybrids were at 14% so they're doing very, very well organically," he added. "And we think that probably some of the loss will transition back to hybrids. Because one, they're better for the environment. You're getting 40 plus miles a gallon, and two, they're significantly cheaper. You know, the amount of rare earth metals it takes to make a lithium ion battery is about nine times what it takes to make a traditional hybrid. So you can manufacture more of them and continue to keep them affordable for consumers."
Tax credits, interest rates and tariffs all play a role in EV purchases and trends, and data continues to be collected.
Groves said he knows some people who own EVs already are worried about infrastructure for their cars but wanted to reassured them.
"Dealers in Colorado made investments several years ago to be able to help consumers operate and maintain those vehicles, and nothing's going to change there," Groves said.
Groves also shared some additional insight CADA just received from the IRS, which indicates if you are buying an EV, the deal has to be done by September 30.
"As long as the deal is contracted by by the deadline, you don't actually have to take possession by the deadline," Groves said. "If you've ordered a vehicle that's not in yet, so long as you have a deposit down and a contract on it, it can come through on, you know, the sixth or the seventh or the 15th, you'll be okay."
State tax credits remain in place through the end of the year, but are expected to drop next year because of budget issues.
