As the deadline approaches for a significant tax break for going green, shoppers are increasingly turning to electric vehicles (EVs). At the recent Orange County Auto Show, Corinne Lawson and her husband took a test drive in a stunning white Mustang Mach-E, an all-electric vehicle manufactured by Ford. Lawson, who is contemplating her fourth Mustang purchase, is now considering an electric model for the first time. "It has a backseat for the grandkids,” said Lawson, who resides in Tustin and is retired. “That might be enough to tempt me.”
The interest in electric vehicles was palpable at the auto show, which opened on Thursday and runs through Sunday. Many potential EV owners eagerly lined up to experience the latest models. With only days remaining to benefit from a tax credit that offers $7,500 off a new EV and $4,000 off a used one, the urgency among consumers is clear. This federal tax credit is set to expire on Tuesday, following a new policy from the Trump administration.
“We’re seeing a big spike in EV sales,” stated John Sackrison, executive director of the Orange County Automobile Dealers Association. “There’s a window of time that’s running out, and we know it’s going to become more challenging for consumers to make the leap over to electric.” According to Sackrison, the percentage of all-electric vehicles sold in Orange County increased from 21% in May to 32% in July, coinciding with the impending tax credit expiration. Nationally, Cox Automotive reported a 19% increase in new EV sales in July compared to the previous year, and J.D. Power predicts that EV sales could reach over 12% of total car sales this month.
The rush to purchase electric vehicles is further fueled by the volatile tariffs imposed by Trump on key trading partners, which have made importing cars and car parts more expensive. At Cadillac of Beverly Hills, electric vehicles now constitute about two-thirds of their new vehicle sales, according to product specialist Naeim Nastar. “We’re still selling gas cars, but most people who come in now are here to take advantage of the tax credit for electric,” Nastar noted, highlighting the dealership's significant increase in EV sales over the past few months.
On social media, dealerships like Ocean Cadillac in Miami are promoting their electric models with urgency. An Instagram ad read, “Don’t miss out — the $7,500 EV Tax Credit ends this month! This weekend is your chance to save big.” At the auto show, Cadillac showcased its electric Lyriq SUV and featured several other electric models like the Optiq and Escalade, drawing attention from attendees who examined their features closely.
Among the attendees was R.J., a resident of Murrieta who opted not to disclose her full name for privacy. She carried a black Cadillac T-shirt she received after her test ride and is contemplating buying a Lyriq, while also showing interest in electric models from BMW and Kia. “I was hoping to get that $7,500 credit,” R.J. shared at the auto show, “but I won’t have time to make my decision before it goes away.”
Analysts caution that the surge in sales may be short-lived. Thomas King, president of the data and analytics division at J.D. Power, stated in a recent report, “The effect on sales will shift from positive to negative. A very significant decline in EV sales is expected for October, reflecting both the expiration of the federal EV tax credit and the normalization after the accelerated purchases this summer.”
For some potential buyers, the end of the tax credit has led them to reconsider their options. Stacey and Jim Palma were initially set to purchase their first EV earlier this year but changed their plans upon learning about the credit’s expiration. The retirees from Long Beach are now leaning towards a more budget-friendly hybrid vehicle. “We’re backing out a little because the rebates are going away,” Jim explained. “Our incomes are limited, and the incentive is not going to be there anymore.”
