The federal tax credit for consumers purchasing an electric vehicle is no longer, having ended on September 30, 2025. Manufacturers leaned heavily on the credit, which allowed qualified consumers to save up to $7,500 on a new vehicle when filing their IRS 1040 forms. Though there were some manufacturers who long used up their allotment of credits, the availability of this incentive helped lift the entire industry.
As the Trump Administration made clear that the credit would come to an end, EV manufacturers began to adjust their plans. Most decided to change their release schedules, delaying new product for months, if not years. Others decided to simply cut back on EV manufacturing, pivoting to hybrids to supply a fuel efficiency alternative.
Manufacturers Respond
But just as the industry adjusts, automakers are planning low-cost versions of current and planned models, effectively offering a near equivalent offer to the lost federal incentive.
For instance, DrivenAutos reported recently that GM would bring back the Chevrolet Bolt for a limited time, offering a base model that will retail for about $30,000. The 2027 Bolt rolls out in early 2026 and will offer corresponding content (with some important updates) to the first-generation Bolt, which was last offered in 2023.
Tesla, long the market leader in EVs, is not bringing forth a new model. However, this manufacturer will offer lower-cost versions of its popular Model Y SUV and Model 3 sedan to drive down prices. We do not have pricing information yet, but the following changes are expected:
• Simplified exterior: Matrix and full LED lighting dropped, smaller wheel sizes adopted, and the panoramic glass roof deleted or covered to cut materials and weight.
• Streamlined interior: Rear-seat display, ambient lighting, heated rear seats, and premium trim materials removed; interior now uses simpler fabrics and fewer components.
• Reduced tech and comfort features: Fewer speakers, less-advanced seat adjustments, and scaled-back storage and lighting options throughout the cabin.
• Trimmed driver-assistance package: Full Autopilot and lane-centering functions not included; only basic adaptive cruise control offered standard.
• Lower-spec battery and charging hardware: Slightly smaller-capacity pack with reduced peak charging speeds, still targeting more than 300 miles of range.
• Limited customization: Fewer paint colors and interior configurations available, with a simplified order structure to streamline production and reduce cost.
Lower Costs, Improved Financing
Hyundai dropped the price of the 2025 Ioniq 5 SUV by $7,500, covering both purchases and leases. For 2026, the price drop increases to as much as $9,800, depending on the trim.
BMW, Ford, Stellantis, and Mercedes-Benz, are each offering discounts, with some matching the previously offered federal tax credit. Many of the discounts, however, are time-limited or apply only to certain trims.
Model Casualties
Not only are manufacturers responding with discounts and special financing, but they are also revisiting their product portfolios. For instance, Stellantis cancelled the all-electric Ram REV pickup truck, choosing instead to pivot toward hybrids.
Volkswagen, which builds the ID.7 crossover for Europe, will now not offer that model in the US. Similarly, Honda has canceled plans to build a model that would have competed with the Kia EV9. Nissan canceled the Ariya and will instead concentrate on building the Leaf. Acura has cancelled the ZDX, but Honda will continue with the Prologue – both models are built by GM. Lastly, Mercedes-Benz has changed its plans and has canceled planned products.
Looking Ahead
As production of electric vehicles decreases, manufacturers are expected to focus more on hybrid models. Toyota is currently the leading company in this segment, while other manufacturers are also investing in hybrids to provide fuel-efficient options without depending on tax incentives.
References
Miller, Caleb. “Here Are All the EVs That Were Canceled or Discontinued.” Car and Driver, 9 Oct. 2025.
Reuters Staff. “Honda to Discontinue Acura EV Assembled by GM in US.” Reuters, 24 Sept. 2025.
Tucker, Sean. “Several Automakers Dial Back EV Plans – Kelley Blue Book.” Kelley Blue Book, 10 July 2025.
Images
First image by Olena from Pixabay.
Second image by JackieLou DL from Pixabay
See Also — Federal EV Tax Credit Ends
