A year after Washington ended the $7,500 federal EV tax credit, carmakers are still discounting EVs. They haven't picked up the credit's share of the bill, though. Automakers spent about $6,600 per new EV in August, according to Cox Automotive, roughly 20% less than in August 2025, when buyers could still claim the credit on top.
So on average none of that $6,600 is new money. It's what remains of discounts carmakers were already offering, and it's an average that hides wide swings between brands. A year ago Cox found Hyundai and Honda piling deals onto the Ioniq 5 and Prologue, while Chevrolet gave the Equinox EV very little help.
That helps if you're shopping, but there's a catch. A carmaker's discount has to be negotiated at the dealer, and it can vanish as soon as a brand decides it has sold enough.
The credit ended a year ago last week. Buyers rushed to beat the deadline and pushed EVs to a record share of new car sales that summer. Then sales collapsed. By August, EVs were 5.7% of new sales, far below August 2025, the record month for EV sales, and Tesla (TSLA) sold 51.7% of them. Cox now says the market "may be stabilizing". Dealers have also cleared most of the EVs that sat on their lots for months early this year: supply fell from about 180 days' worth early in 2026 to 78 days in August, Bloomberg reported.
The quiet winner is the used lot. Used EV sales kept growing through the year, and used EVs now sell as fast as used gas cars. The average listing costs roughly $17,000 less than the average new EV. For a lot of families, that gap matters more than any tax break did.
Beyond that, your options depend on where you live. In June, Brookings Metro counted about 20 states with some kind of EV rebate. Some of those programs have since closed or run out of money, and Pennsylvania's rebate for income-qualified buyers now simply says it's closed. Colorado has one of the more generous programs. Even so, its energy office director, Will Toor, admits the state "can't step in and replace" Washington.
Hybrids picked up many of the buyers EVs lost. Now pricier gas is pulling some of them back. The war in Iran has pushed up fuel costs, and AAA put the national average for regular at $4.41 a gallon on Oct. 1, after a record September.
"Because of the war, because of gas prices, we've also seen a rise and a recovery in EV sales," Hyundai's North America CEO Randy Parker told Bloomberg. Cox's numbers point to a modest rebound: about 247,000 new EVs sold in the second quarter, up nearly 15% from the first, though still down 20% from a year earlier.
Cox's third quarter EV report should show whether that recovery is real. Cox hasn't announced a date, but last year's version came out on Oct. 10, so look for it in the next week or two.
Sources
- 1.EV Market Monitor, August 2026 · Cox Automotive
- 2.EV Market Stabilizes in Q2, as New Entries Help Slow Sharp Sales Decline · Cox Automotive
- 3.A year after federal EV tax credits ended, a patchwork of state EV incentives remains · Marketplace
- 4.Anxiety Over Gas Prices Points to 'Looming EV Comeback' in US · Claims Journal (Bloomberg)
- 5.National Average Dips Following Record-Setting September · AAA
- 6.EVs Could Be Staging A Comeback Thanks To High Gas Prices · Carscoops
- 7.States at the wheel: A state policy scorecard on electric vehicle readiness · Brookings Institution
- 8.Anxiety Over Gas Prices Points to 'Looming EV Comeback' in US · Bloomberg
- 9.Alternative Fuel Vehicle Rebates for Consumers · Pennsylvania Department of Environmental Protection
- 10.EV Market Monitor, August 2025 · Cox Automotive
- 11.Record High: Electric Vehicle Sales Hit 438,000 in Q3 as Buyers Rushed to Beat Expiring Incentives · Cox Automotive
Reported by the WattsUpNext desk from the sources linked below. Spot an error? Tell us at corrections@wattsupnext.com.
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