Electric vehicle buyers were in a frenzy in July as they rushed to claim the federal clean vehicle credit, a report from car research firm Edmunds revealed. The impending Labor Day weekend is poised to be one of the best opportunities to drive home an electric vehicle (EV) as many buyers are still unaware of the existence of affordable lease deals.
According to Edmunds analysts, electric vehicle leasing reached new heights in July, with leasing accounting for 70% of EV transactions compared to just 10% in 2022. This surge in leasing can be attributed to the looming deadline of September 30 for the federal tax credit, which offers up to $7,500 in incentives for EV buyers. Purchasing an EV outright allows for claiming the tax credit on a limited number of EVs that meet specific requirements, while leasing allows customers to claim the credit regardless of the car or battery’s origin.
With the One Big Beautiful Bill signed by the Trump administration eliminating both the tax credit and the leasing loophole, automakers are eager to capture as many lessees as possible before the September 30 deadline. The EV consideration rate among new car shoppers peaked at 17.10% in July, dropping slightly to 16.2% by the end of August, according to Edmunds.
Jessica Caldwell, head of insights at Edmunds, emphasized the importance of seizing the opportunity now as EV leases offer the hottest deals of the summer. She noted that EV buyers tend to stick with electric vehicles long term, making every customer who switches to an EV a win for automakers investing in EV production.
Leasing offers for EVs are currently aggressive, with deals like the Hyundai Ioniq 5 available for $149 per month and the Chevy Equinox EV for $249 per month. However, Caldwell highlighted that many buyers are unaware of these great deals, emphasizing the need for dealers and automakers to promote EV awareness.
As the IRS confirmed that any binding contract signed by September 30 will qualify for the tax credit, the upcoming Labor Day weekend presents an ideal opportunity to secure a great deal on an EV. Edmunds advised against procrastinating, urging potential buyers to begin their search early to ensure they can secure a contract before the deadline.
In conclusion, the EV market is currently ripe with opportunities for buyers to take advantage of lease deals and tax incentives before they expire. The upcoming Labor Day weekend represents a prime window to score a great deal on an EV, with automakers motivated to attract new EV shoppers and build long-lasting relationships with customers in the growing EV market.