Electric-vehicle tax credits once served a vital purpose. They boosted early adoption, softened sticker shock and helped dealers bring hesitant customers into a new kind of vehicle experience.
But that was then.
Today’s EV market is different – and maturing quickly. Between growing consumer demand, improved vehicle affordability and expanding product lines from nearly every major automaker, many in the industry are starting to ask a tough but timely question: Are federal EV incentives still necessary? More to the point: Are they doing more harm than good?
In conversations with dealers during the past few weeks – including heavy hitters in the EV market space – the answer is increasingly: Not anymore.
A Letter to Congress, and a Reality Check
Recently, dozens of dealer groups – including CarMax and Carvana – partnered with battery analytics firm Recurrent to send an open letter to Congress, urging lawmakers to retain or slowly phaseout the federal EV tax credit program for the benefit of used vehicles.
Yet the message from several dealers that spoke with WardsAuto is different: The program isn’t working. The majority of desirable used EVs are aging out of eligibility, leaving customers confused and frustrated – and dealers empty-handed.
What the dealers who spoke with WardsAuto don’t say outright, but what’s clear between the lines, is this: The market has moved past the need for these kinds of incentives.
Elon Musk Said the Quiet Part Out Loud
Even Elon Musk, whose Tesla vehicles once benefited from years of EV subsidies, recently stated: “Tesla doesn’t need subsidies. EV tax credits should sunset.” Say what you will about Musk, but his point holds for more than just Tesla.
EVs no longer need government handouts to be competitive, say dealers. Ford, Hyundai, Kia, General Motors and others are producing electric vehicles that stand on their own merits – whether in terms of performance, design or value. The market is maturing faster than policymakers seem to realize.
Complex, Confusing – and Counterproductive
Ironically, the used EV tax credit – which was supposed to broaden affordability – has become a sales obstacle, dealers say. It’s so bogged down in eligibility rules tied to vehicle age, price, buyer income and VIN-specific sourcing that even experienced F&I teams struggle to explain it. Customers who dip their toes into EV shopping often believe they’ll receive a $4,000 break – only to find out the model they want misses a requirement by inches.
That’s not a sales tool. That’s a deal breaker.
Instead of extending or patching this increasingly ineffective system, Congress should let it sunset – and focus efforts elsewhere.
What Dealers Actually Need
If lawmakers want to support EV adoption, they should invest in charging infrastructure, consumer education and utility grid upgrades, dealers who spoke with WardsAuto say. These are the true barriers to EV growth in 2025 – not lack of rebates.
It’s time to shift from buying adoption to earning trust. That means helping customers understand the total cost of ownership, helping cities and rural areas alike install reliable public chargers, and ensuring electric vehicles remain affordable because of market forces, not tax gimmicks.
The reality is, EVs are no longer niche products that need artificial boosts. We’re already seeing price wars, tech leaps and rising consumer interest – all without relying on outdated subsidies.
So maybe the best thing Washington can do for the EV market today is focus on the true barriers to entry into this market.
CORRECTION: Editing errors in this commentary misrepresented the message in the above-mentioned letter. Those who do not believe the EV incentives program is working are dealers who spoke with WardsAuto. Those same dealers believe the market has moved beyond those types of incentives. The authors of the Recurrent letter believe the program does work and dissolution of it would cause irreparable harm to consumers, dealers and the industry. WardsAuto regrets the errors.
