U.S. consumers are racing to buy electric vehicles before time runs out, a similar story experienced in Quebec when the Canadian government paused ZEV incentives earlier this year.
CARFAX reported a sharp surge in sales of electric and hybrid vehicles in September in the U.S. They said consumers rushed to take advantage of federal tax credits for new and used EVs before they expire at the end of the month. EVs and hybrids are selling about 30 per cent faster than they were at the start of the summer, based on the company’s data.
“EV and hybrid sales are spiking, yet prices remain stable,” said Patrick Olsen, Editor-in-Chief at CARFAX, in a statement. “For shoppers considering a purchase, experts say now is the time to act.”
According to CARFAX, the Inflation Reduction Act included EV and some plug-in hybrid incentives. A $7,500 tax credit is offered for new models and $4,000 for used. Congress voted to eliminate the credits, with Sept. 30 as the deadline for eligible purchases to qualify.
A recent Cox Automotive report is forecasting a record 410,000 EVs will be sold in the third quarter. That’s a significant increase — of 21.4 per cent — year-over-year, and up more than 30 per cent compared to Q2. The federal tax credit was considered a “key catalyst” for EV adoption.
“This shift (away from the tax credit) will test whether the electric vehicle market is mature enough to thrive on its own fundamentals or still needs support to expand further,” said Stephanie Valdez Streaty, Director of Industry Insights at Cox Automotive, in a statement.
Cox Automotive is anticipating that EV sales will slow notably in Q4, but long-term sales growth will continue.
In Canada, battery electric sales are down — now long after the federal incentive pause — but plug-in hybrids are up, based on data from Canadian Black Book’s latest Market Insights report.
