Shoppers are snapping up electric vehicles as time is running out on a big tax break for going green.
At the Orange County Auto Show, Corinne Lawson and her husband took a test drive in a glimmering white Mustang Mach-E, an all-electric vehicle made by Ford.
Lawson is looking to buy her fourth Mustang and — for the first time — is leaning toward a battery-powered one. The smaller motor makes it a more comfortable car for her family.
“It has a backseat for the grandkids,” Lawson said, who lives in Tustin and is retired. “That might be enough to tempt me.”
Interest in electric vehicles was high at the auto show, which opened Thursday and goes through Sunday. Potential EV owners lined up to get rides in the latest models. They have only days left to take advantage of a tax credit that would save them $7,500 on a new EV and $4,000 on a used one.
The federal tax credit is set to expire Tuesday, in accordance with a new policy from the Trump administration. As the clock ticks, consumers and auto dealers have seen a jump in sales of new and used EVs.
“We’re seeing a big spike in EV sales,” said John Sackrison, executive director of the Orange County Automobile Dealers Assn. “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.”
In May, before Trump moved to eliminate the tax credit, around 21% of new vehicles sold in Orange County were all-electric, Sackrison said. That number jumped to 25% in June after Trump targeted the credit, and again to 32% in July.
National sales of new EVs jumped 19% in July from last year, Cox Automotive said. J.D. Power predicted that nationwide EV sales will likely reach a record of more than 12% of car sales this month.
The rush to buy EVs also comes as Trump levies volatile tariffs on key trading partners, making cars and car parts from overseas more expensive.
At Cadillac of Beverly Hills, electric vehicles make up about two-thirds of new vehicles sold, said product specialist Naeim Nastar. The dealership has seen a “significant increase” in electric vehicle sales over the past couple of months, he said.
“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 said.
On Instagram on Thursday, the Ocean Cadillac dealership in Miami posted an ad promoting several of its electric models.
“Don’t miss out — the $7,500 EV Tax Credit ends this month!” the ad said. “This weekend is your chance to save big.”
At the auto show, Cadillac offered test rides in its electric Lyriq SUV and displayed several electric models on the floor, including the Optiq and Escalade. Show attendees slowly walked through the maze of vehicles, examining features like charging ports and trunk space.
Murrieta resident R.J., who declined to share her full name for privacy reasons, carried a black Cadillac T-shirt she received as a gift after her test ride. She’s considering buying a Lyriq, she said, but is also interested in electric models from BMW and Kia.
“I was hoping to get that $7,500 credit,” R.J. said at the auto show, “but I won’t have time to make my decision before it goes away.”
Analysts warned that there will likely be a hangover after the buying spree.
“The effect on sales will shift from positive to negative,” Thomas King, president of the data and analytics division at J.D.Power, said in a report this week. “A very significant decline in EV sales is expected for October, reflecting both the effect of the federal EV tax credit expiring and the start of payback from all the EV purchases that were accelerated into the summer. “
For some potential buyers, the end of the tax credit means they will stop shopping for EVs.
Stacey and Jim Palma were getting ready to purchase their first EV earlier this year when they found out the credit had an expiration date. The Long Beach retirees said they were now interested in a more affordable hybrid vehicle.
“We’re backing out a little because the rebates are going away,” Jim said. “Our incomes are limited, and the incentive is not going to be there anymore.”
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