Electric and Hybrid Vehicle Sales Surge as US Tax Credit Deadline Looms
The electric and hybrid vehicle market is witnessing a surge in sales as the US federal tax credit for these vehicles is set to expire at the end of September 2025. Volkswagen, Tesla, BMW, and Volvo are among the strongest beneficiaries, with Volkswagen leading European electric car sales in August 2025.
Volkswagen has seen significant gains in electric car sales, while Tesla delivered nearly 500,000 electric cars in Q3 2025. Meanwhile, Volvo has reached one million plug-in hybrids sold. German manufacturers, including Mercedes and BMW, have also shown notable growth in this sector. The Inflation Reduction Act has introduced EV and some plug-in hybrid incentives, offering a $7,500 tax credit for new models and $4,000 for used ones. Despite the increase in EV and hybrid sales, overall vehicle sales have remained mostly steady. According to CARFAX data, these vehicles are selling about 30% faster than usual this summer.
As the federal tax credit for new and used EVs and some plug-in hybrids is set to expire at the end of September, consumers are rushing to take advantage of the incentives, driving the current surge in sales. Major automakers are capitalizing on this trend, with Volkswagen, Tesla, BMW, and Volvo leading the market.
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