BONUS: No Crash, No Crisis - The Truth About US EVs Post-Tax Credit

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Well, you know I'm just an idiot podcaster without the infinite access to world-class

market analysis that no doubt CEOs have on tap, but it's now been a month and the predicted

apocalypse hasn't materialized.

In fact, what we're seeing is a masterclass in how markets adapt, how manufacturers respond

and how resilient consumer demand for EVs is actually.

Today's episode is going to challenge the doom and gloom, the dominated headlines over

the last few months.

We're going to look at the actual data from the month of October.

Not all the sales data that's in that won't come out for a little while yet, but examine

the creative ways that car makers are keeping EVs affordable without the federal help and

draw lessons from other major markets like Germany and here in the UK that went through

similar transitions and came out the other side stronger.

Before we dive in, let me be clear, I'm not saying the loss of $7,500 for new cars and

$4,000 for used cars is meaningless.

It's a significant change.

What I am saying is that the predictions of total market collapse have been overblown

or at least premature.

We don't know yet, do we?

Let's just wait and see.

The evidence is mounting that the American EV market is actually more mature and resilient

than all these naysayers believed.

Just a reminder, our bonus shows are exclusively for Patreon supporters for the first seven

days only.

Patreon insiders get early access, and then it goes into the free feed seven days later.

Patreon supporters get their name on the list of legends in the show notes of every show.

You get to take part in the paid members chat called Killer What Confidential, which is

where I hang out these days, not on social media anymore for, you know, just reasons

it became a depressing place to be, and you can shape future shows as well.

You can be in the know, you can take part in the conversations we have to pick future

questions of the week, and you can join us now at patreon.com slash ebnewsdaily and be

part of something special.

So let's get into it.

The predictions that were made.

Let's recap how negative some of the forecasts were to varying degrees.

Jim Farley, the CEO of Ford Motor Company, delivered the most memorable warning speaking

at the Ford Pro Accelerate Conference in Detroit on September 29th, literally the day before

the credit expired, when the general media were desperate for any quote or story on this

major topic, and Farley delivered what they needed, a negative headline.

He said, and I quote, I wouldn't be surprised if EV sales in the US go down to 5% about

industry from probably this month, 10 or 12%.

And quote, that's a market crash of 50% of the US EV market gone overnight.

Really?

Did he believe that?

Why was he saying that?

Well, CEOs of big organizations rarely miss speak.

They always say something for a reason, whether it's in front of politicians because they're

arguing a case, whether it's in front of the media to get their message out.

But why did he predict a halving of the EV market in the US?

It was one of the worst predictions and boy, did the media lap it up.

He went further saying, I quote, I think it's going to be a vibrant industry, but it's

going to be smaller, way smaller than we thought.

Customers are not interested in a $75,000 electric vehicle.

And he also warned that the market would be, and I quote, considerably smaller than we

anticipated, particularly with the recent changes in tailpipe emissions policy and the

discontinuation of the $7,500 US consumer incentive, end quote.

Well over at General Motors, the message was equally pessimistic.

Duncan Aldred, GM's senior VP and president of North America, wrote on the company blog,

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.

We will almost certainly see a smaller EV market for a while.

We won't overproduce.

Paul Jacobson, who is GM's CFO, told investors,

we're going to witness some fluctuations in October and November and I anticipate EV

demand is going to decline sharply.

Even Nissan joined the chorus of doom and gloom.

The chairman of Nissan Americas, Jeremy Papin, warned the electric vehicle sector is poised

for a downturn.

This competition is going to be extremely intense as there is an abundance of inventory.

Well, the analysts weren't any more optimistic.

Stephanie Valdez-Streety, director of industry insights, a cox, the parent company of Kelly

Bluebook said, and a quote, the federal tax credit was a key catalyst for EV adoption

and its expiration marks a pivotal moment.

This shift will test whether the electric vehicle market is mature enough to thrive on

its own fundamentals or needs further support.

JD Powers Brent Gruber, executive director of EV practice,

warned that the elimination of EV tax incentives and public charging funding

has the potential to affect two critical barriers, charging and vehicle prices.

Ernst & Young's mobility lens forecaster said that EV adoption in the US would slow

to under 2% annually through 2030, with EVs accounting for 11%, which is where they are

about now, by 2029, which four years time.

Well, that's their prediction.

Told you, it's really bad.

And these aren't fringe voices, by the way.

These are CEOs and executives and respected industry analysts all singing from the same

hymn sheet.

Without the federal tax credit, the EV market is doomed.

Not just short term.

So what's the reality that I see?

And bearing in mind I'm thousands of miles away, I just don't get it.

And if I'm missing something, please correct me, but I'll present my argument in the most

honest way that I can and respectfully if you disagree, correct me.

So what's actually happened in the month of October?

Not too much.

We do know that the third quarter of 2025 did indeed see record EV sales.

No one's disputing that.

But that was expected as buyers rushed to meet the September 30th deadline because everyone

was saying, well, from October 1st, they're going to be the prices through the roof.

The real test was always going to be what happened this month.

And that's where it gets interesting.

Data from Cox Automotive, US EV sales in the third quarter, 438,500 or so,

up 40% from the previous quarter and up 30% from the previous year.

EVs were 10.5% of total sales and all time high.

So we're coming off of that.

We are, as of recording, because this goes out to Patreons first and then on the free feed

seven days later, which will be in about November, but we're almost at the end of October.

And while complete sales data is not available,

what we are seeing is a market anything but in freefall.

We're witnessing an orderly transition.

The manufacturers have stepped in with their own incentives to fill the gap

that was left by the federal money.

The record Q3 sales helped to put inventory into the market.

And dealers are motivated to move that inventory.

More importantly, automakers who built their EV strategies around a decade of

projected tax credits and don't get me started on politicians changing what the previous politician

did. I don't care which side of the aisle you sit.

Promises were made, maybe not by you, but by the previous guy.

But still, it's as good as a handshake and you look somebody in the eye and go,

well, we promised these credits for decades or at least 10 years.

You built factories based on that.

I might not agree with it, but the right thing to do is to stick with the promise that was made.

And by weaseling out of it, I think it's a pretty crappy thing to do.

But either way, it's not a political thing.

It's all politicians, by the way.

I think you stick to the promises that the previous girl or guy made,

even if you don't agree, because companies need to set their sales accordingly.

Anyway, let's move on.

They've all made these massive investments.

And so they all now have to compete on the fundamentals of price, feature set, and value.

Ford, despite the CEO's very pessimistic prediction,

and I love the Ford products, by the way,

announced that it would, on October 1st,

preserve the competitive lease rates that we currently offer in the market.

GM made a similar commitment.

Both companies initially tried to claim the tax credit through a creative interpretation

of IRS rules, doing it with the IRS, by the way, nothing underhand.

Buying inventory from dealers, well, the finance arms of those companies,

buying inventory back from dealers, claiming the credit themselves,

and then leasing the cars that the dealers could advertise those lease prices

with the tax credit included.

Ultimately, those plans had to be abandoned after political pressure,

really from just a couple of Republicans, but instead,

they didn't fancy the fight and they knocked that idea on the head.

The reality is that manufacturers have already built substantial EV production capacity.

They have factories running, supply contracts in place,

and billions of dollars in sunk costs.

And whilst you can get out of contracts and play penalties,

and you can change what's in a factory, simply put,

turning off all EV production is not an option.

They've got to keep vehicles moving,

which means keeping them attractive to buyers.

Analysis from ING Bank on October 7th concluded that the US EV market transition

has been delayed but not derailed, noting that EV sales may decline this month,

although thanks to the front loading we anticipate the full-year EV share

is going to be over 10%.

The key insight here is that while October sales will almost certainly be down

from the last day of September, I'm not denying that.

It was not artificially inflated number in Q3,

and the question is now whether those numbers settle at a very sustainably healthy level

or their crater, which was all the predictions.

And early indications, to me at least, suggest

we're going to have a softer landing than they thought.

So what's been the manufacturer response?

What other countries done?

And what do we learn here in the UK and Germany?

And why the market is more resilient than many people think?

I'll tell you after we take a quick break, a lot more to discuss.

Stick around, I'll be back in a moment.

All right, welcome back to the podcast.

So on this bonus episode, we're talking about the response to the tax credit

going new and used cars.

How have the manufacturers responded?

Well, the real story in October isn't about the lack of government incentives,

it's about how the private industry stepped in.

And what we're seeing is remarkable, starting with the domestic manufacturers.

Chevrolet is offering 0% APR for five years

on Equinox, Blazer and Silverado, 0% financing on a 60-month loan is huge value.

On a $50,000 vehicle, that's $6,500 in interest compared to 6% loan.

That's the equivalent of the old tax credit delivered through finance savings.

Ford is running 0% for 72 months on the Mustang Mach-E and Ford F-150 Lightning.

Ford credit is offering attractive lease deals with the Mach-E available for $336 over three years.

The company said it would preserve the competitive lease rates we currently

offer in the market even after abandoning the plan to claim tax credits on dealer

inventory that I just mentioned.

GM is offering $6,000 in net incentives on EV agreements through October.

The Chevrolet Blazer can be leased for $299 a month for two years with $1,500 down.

GMC offering the Hummer with 0% over three years.

On to the international brands.

Hyundai, on October the 1st, emerged with an aggressive offer.

$7,500 off the vehicle on the Arnick 5, exactly the old tax credit.

Also offering 0% financing for 72 months on the Arnick 5 and Hyundai announcing

massive price cuts on the 2026 Arnick 5 range with reductions up to $9,800 depending on trim.

The Hyundai Arnick 5 SE with rear wheel drive starts at $35,000 down from $42,500

for the old model year.

That Arnick 5 can be leased from $189 a month.

Kia, Hyundai's sister brand is matching the aggression.

EV6 and EV9 come with $9,000 in bonus cash, it's what they call it,

and 0% APR for five years, six years, sorry, and a $2,000 bonus cash on the EV6.

The Nero EV starts at $169 a month on 0% APR for 72 months and $2,000 back.

As of today, Honda is offering the prologue with 0% APR for 60 months and leased deals at $289 a

month.

Stellantis brands are very creative, the company is mirroring the federal tax credit

for its plug-in hybrid and BEVs and adding cash bonuses on dealership inventory.

The Jeep Wagoneer S comes with $15,000 in bonus cash and 0% for 72 months.

The Dodge Charger, 0% for 72 months.

Chrysler Pacifica plug-in hybrid, the same.

Luxury brands are competing to BMW offering the i4 with lease deals at $399 and a $7,500

purchase credit or $299 APR for 60 months.

The iX comes with $7.5 grand off the purchase price as well.

Volkswagen doing 0% on the iD4 and Volvo offering very cheap interest and discounts on their EV range.

Nissan offering 0%.

What about the market leader, Tesla, the bellwether of the EV industry?

That has moved decisively to maintain its competitive edge in the post-credit era.

They've cut their lease payments by 15% for the Y and 23% for the 3 to offset the loss of the federal

subsidy.

The Model Y now leases from $4.49 a month down from $5.29.

Model 3 dropped to $3.29 a month and both benefiting from the Tesla-designed lease credit

that is about $6,500.

Even the Cybertruck, which nobody wants, according to the sales figures at least,

saw a reduction in its lease.

These discounts run through the end of October at least and could be extended

and are bridging this demand until their standard trims arrive before the end of the year.

Lucid is offering the air sedan with 0% APR for 72 months and $7.5 grand off.

Let me be clear about what all this means.

I know I've rattled through that at breakneck speed.

If you walk into a dealership now, at least before November, and I think they'll be extended

personally, even the ones that were on dealer inventory, I think they'll magically offer it

on the next model year.

If you walk into a dealership today, looking for an EV, you will find deals that are as good

or even better than what was available on the last day of the federal tax credit.

The value has simply shifted from government money being handed out to dealer incentives

and manufacturer incentives and finance incentives.

If you believe what you were told, that we were on a downward spiral since September 30th,

that there's a chance that actually by waiting until October 1st, you got a better deal.

The bit that nobody ever says out loud is that MSRP and that money off a big total price

is entirely the wrong metric to focus on because nobody buys a car like that.

When was the last time you walked into a dealer with $50,000 in your pocket and went,

I'll have the red one, right?

There's an argument that buying your car should never have been tied to your personal

tax liabilities and getting some sort of credit, whether it was applied when you filed next year

or on the hood.

Instead, the EV market this month responded with discounted monthly deals exactly the way the

automotive industry has always worked.

They might be EVs, but they're still cars, and I know one thing about dealers and car makers,

they know how to sell cars as Ivan Jury from Edmunds noted, dollar for dollar,

you won't discover a more advantageous deal on a comparable internal combustion engine vehicle,

right now on EVs.

So what can we learn then?

The skeptics might say, sure, manufacturers incentives can last for a while,

but they can't sustain it.

That's a fair point, right?

So let's look at what happened in the markets.

Germany is an interesting case study.

In December 2023, the German government abruptly ended the I think it's called

Umwelth bonus program, which had provided grants up to 6,000 euros,

so a similar amount than the US, for new bear purchases.

And the result was, frankly, dramatic in the immediate aftermath of the sudden removal.

Very unexpected.

EV sales dropped by not 50%, as was Ford's prediction, but 28% in the year without subsidies.

And by July of the following year, they were down 37%.

That's not 50.

Just as we've seen in the USA, though, industry observers in Germany immediately

predicted a prolonged downturn.

But here's what actually happened.

Germany v. Sales have now recovered by January of this year.

Bev registrations have been surging 53.5% compared to January of 2024.

The market found its equilibrium.

Manufacturers adjusted pricing and incentive structures.

Organic demand, improving technology, expanding charging,

and strict EU emissions regulations all compensated for the loss of government handout money.

And now, recognizing that the domestic car industry kind of needs a bit of support,

because the Chinese are coming and what the heck have we been doing for the last 10 years?

Germany is now bringing back incentives, but with a different structure.

Starting next January in 2026, they'll offer 4,000 euros and EVs under 45 grand

for low and middle income buyers.

The United Kingdom, where I am, tells an even more optimistic story.

After discontinuing various EV incentives over the previous years,

I got a couple back in the mid-teens or 2015, 2016, and then a few years later.

I bought a couple of Renault Zoe's and got money off them.

I didn't need it, but the UK government money is always there.

You're going to take it, right?

And so that's kind of the story of a lot of government handouts.

I probably would have bought the vehicles even without them.

But hey, I took the money.

Now they've bought back the electric car grant, offering 3,750 pounds,

it's about maybe $5,000, for vehicles under 37K.

The response has been remarkable.

Last month in September, UK new car registrations were up 13.7 percent,

the strongest September since the pandemic in 2020.

Battery electric vehicles drove that growth.

They were up 30 percent year on year.

To a record, 72,779 units, the highest monthly volume ever.

We're coming off the back of literally the best month that EVs have ever had in my country.

And I still see negative headlines.

For the first time, electrified vehicles, according to the data,

which I hate because it includes shabby hybrids, is more than 50 percent.

UK market is a demonstration that with the right policy support,

even modest support and strong manufacturer commitment,

EV adoption can survive the highs and lows of government handouts.

Norway provides the ultimate example of markets.

Norway is now phasing out its main EV subsidies after achieving,

last month 98.3 percent pure Bev, not plugins,

because plug-in hybrids are the other, the remaining percent.

There's no petrol and diesel left.

98.3 percent in last month, pure B EV.

As Andrew Lee, he wrote in Forbes on October 15th,

Norway is phasing out EV subsidies after reaching 95 percent adoption,

proving that smart, gradual rollbacks work.

Yeah, Norway have signposted this, by the way, a long way out.

They've told buyers, here's what's happening.

Here's the roadmap.

Here is a gradual step down of the incentives.

A 2022 academic study in the journal Energy Economics,

analyzed where the Norway's EV market was now self-sustaining.

The reef search has found that in 2019, or by 2019,

all Norwegian municipalities had overcome critical mass constraints.

An approximately 60 percent of the population

lived in areas with a high enough adoption, even without subsidies.

The study concluded the objective of advancing markets

beyond critical mass constraints

does not validate the current level of subsidies.

Six years ago, they could have gone, according to this study,

and it wouldn't have affected the market.

Norway's experience proves that EV markets can be self-sustaining

that requires consistent policy support.

The lesson from these international examples is clear to me, at least.

Yeah, like removing subsidies creates short-term disruption,

but markets adapt.

And I'm not here arguing for free markets in all circumstances.

I'm not that person.

I'm no economics expert.

But manufacturers have a lot of power in terms of pricing.

They can improve their products, shock horror,

and they can find new ways to compete.

Consumers who want the superior driving experience of an EV,

lower operating costs, environmental benefits of EVs,

will always buy them.

And the market finds a new equilibrium.

It might just take a while to get there.

And as I always say, I'm no expert in finance,

but I did read something when researching today's podcast

that really struck home.

And this article said that subsidies and incentives

are introduced to support often emerging markets and new technologies.

But important innovation, but that at the time of their introduction,

they were always introduced, subsidies and incentives,

whether it's any sector, with the intention to one day be removed,

they're not meant to be forever.

By their very nature, they serve a purpose at a point in time.

So whether you agree with the timing of the federal tax credit ending in the US,

it was always going to go.

And why is the market more resilient than many people think?

Why do I think the dire predictions were overdone?

Right, several factors, and then I'll wrap this thing up

because I've been talking for a long time.

So number one, product quality has improved dramatically.

The EVs available now are not the EVs from 10 years ago,

but the expensive toys of early adopters were buying.

You can now buy a Hyundai Arnick 5 with 303 miles of range at $35,000.

That's cheaper than many midsize gas SUVs.

The Equinox EV is less than $35,000 with 319 miles of range.

Practical, affordable, great vehicles, the new bolt and new leaf

are going to smash below $30,000 before monthly offers.

Secondly, charging infrastructure has expanded significantly.

Range anxiety, whilst a concern for some people,

and I hate that phrase because, you know,

why don't you get petrol anxiety

if you're driving through somewhere with no petrol stations, but either way.

Range anxiety is not an issue anymore, even compared to five years ago.

Tesla's supercharger network is growing faster than any other charging network,

and they're opening up to new brands rather.

Numerous other charging networks are expanding,

and we still need more charges in rural areas,

and DC fast charging in the right place,

and access to off-peak home charging,

or at least where your car is parked,

whether you park your car at work all day,

or on street or wherever, we need to find those solutions.

Thirdly, total cost of ownership is always going to favor EVs.

Even without the tax credit, EVs are way cheaper to run.

At the current electricity prices and gas prices,

typically the owners save up to $1,500 a year alone.

Maintenance costs are significantly lower, no oil changes,

no transmission fluid, no brake pad replacements as often because of regen braking.

Over seven years, these savings really add up.

Fourth, many states offer their own incentives,

California, Colorado, New York, New Jersey, and more,

all providing their own rebates and tax credits.

They haven't gone away.

And fifth, perhaps most importantly,

there's genuine consumer demand.

People who drive EVs overwhelmingly love them,

the instant talk, the smooth acceleration, the quiet operation,

the convenience of home charging, or make devoted customers.

You haven't got to be some sort of evangelist,

just to go, yeah, I prefer it, the next one I buy will be an EV.

Once someone drives an EV for a week, it's hard to go back to combustion.

That genuine enthusiasm creates organic demand that doesn't need incentives,

as regular listeners always hear me say all of the time,

you can't put the genie back in the bottle.

Once you buy an EV, all the data over the years says,

nearly everybody, their next car they buy is another EV.

And that's a flywheel, which continues to accelerate.

All right, let me finish off conclusion then.

I'm not here to tell you that losing the federal tax credit doesn't matter.

It absolutely does.

It will slow the adoption curve in one way or another.

It makes the math harder if you're really budget conscious,

or if you're absolutely relying on that to make your purchase.

And it removes one of the tools that was speeding up EV adoption in the United States.

Why I'm telling you though, is that all these predictions of market collapse

have been wildly overblown.

The American EV market in October 2025 is not imploding.

It hasn't and it won't.

Manufacturers are responding with aggressive incentives that maintain affordability.

Consumers continue to buy electric vehicles because they're better.

The fundamentals of the market, improving tech,

more infrastructure, lower operating costs,

strong consumer satisfaction once you buy one, they haven't changed.

Jim Farley predicted the market would drop by half from 10 to 5% of new vehicles.

Analysts warned of a devastating crash.

The reality is a lot more modest.

It's probably going to be a temporary pullback and a return to steady growth.

The EV revolution is moving from early adopter to early mainstream,

entering a new phase where products need to succeed on their own merits.

The CEO of Rivian, RJ Scarridge, has been very vocal on this recently.

The best like cream will rise to the top.

And obviously he thinks his Rivian vehicles are the best.

When you don't rely on artificial financial support,

people seek out the best value.

And from everything we've seen in the first month following,

the tax credit exploration,

I think we're up to the challenge.

The American EV market isn't collapsing.

It's just maturing.

And that's exactly what we need for long-term, stable success.

Thanks for listening to EV News Daily.

I'll see you on the next one.

BONUS: No Crash, No Crisis - The Truth About US EVs Post-Tax Credit

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