Electric vehicle makers like Tesla (TSLA), GM (GM), and Ford (F) will be in a world of pain when President Trump’s “One Big Beautiful Bill Act” (OBBB) ends federal EV tax credits later this month. Sales of EVs in the US are expected to be cut in half compared to current levels, at least according to one highly regarded analyst.
The new guidance put forth by the Internal Revenue Service (IRS) does provide some wiggle room for EV buyers to take delivery after the Sept. 30 deadline. But once those deals are completed, moving EV inventory could be a hard slog.
“So I think you’re going to see third quarter EV sales probably go up slightly, or at least remain strong, simply because people who want to buy one are going to jump in before that Sept. 30 deadline,” iSeeCars.com executive analyst Karl Brauer told Yahoo Finance.
But after that is a steep sales falloff.
“I think then … we’re going to see a pretty big drop,” Brauer said. “I could see US [market share] dropping well below 4% immediately after the Sept. 30 incentive goes away and maybe settling in the beginning of 2026, around 4%,” he said.
A 4% EV market share would be half of where it stands now. Cox Automotive reported that the surge in EV demand actually pushed EV market share in August to 9.1%, with sales up a whopping 20% year over year for the month to over 130K EVs sold as buyers rushed in before the tax credit expiration.
Brauer — who spent 19 years as editor in chief at Edmunds, and executive publisher at KBB’s Autotrader, among other publications — sees the situation as dire for EVs, at least compared to other studies.
Last year, an analysis by UC Berkeley professor Joseph Shapiro found that EV sales in the US would drop 27% if the federal EV tax credit were removed, compared to a scenario with the credit in place.
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Not surprisingly, thanks to the rush to take advantage of incentives, GM reported on Tuesday that its August EV sales touched a new monthly record — more than 21,000 EVs sold under its Chevy, Cadillac, and GMC brands.
“There’s no doubt we’ll see lower EV sales next quarter after tax credits end September 30, and it may take several months for the market to normalize, GM North America senior vice president Duncan Aldred said in a statement. “We will almost certainly see a smaller EV market for a while, and we won’t overproduce. Still, we believe GM can continue to grow EV market share.”
iSeeCars’ Brauer believes GM and others will try to keep sales momentum going by cutting into margins with discounting.
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