Prospective buyers of Tesla (TSLA), GM (GM), Ford (F), and other electric vehicles (EVs) now have additional flexibility before the September 30, 2025 federal EV tax credit expiration, thanks to new IRS guidance.

Under the One Big Beautiful Bill (OBBB) legislation, the $7,500 federal EV tax credit had a hard deadline, previously interpreted as requiring both signing a contract and taking delivery before September 30. However, the IRS clarified that “acquired” does not strictly mean delivery must occur before the deadline.

"If a taxpayer acquires a vehicle by having a written binding contract in place and a payment made on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they take possession of the vehicle, even if delivery happens after September 30," the IRS explained. Buyers will submit a "time of sale report" via the Energy Credits Online portal once they receive the vehicle.

This guidance allows buyers to reserve EVs with a deposit, while manufacturers can fulfill orders without immediate inventory, supporting continued EV sales.

According to Cox Automotive, July 2025 saw new EV sales surge 26.4% month over month and 19.7% year over year to 130,082 units, lifting the market share to 9.1%. July represented the second-highest monthly total on record, with 11 brands reporting their best EV sales of the year. However, EV days of supply fell sharply to 87 days, down 32.3% month over month and 49% year over year, signaling potential supply challenges ahead of the September deadline.

Stephanie Valdez Streaty, director of insights at Cox Automotive, noted: “With the IRA tax credit set to expire at the end of September, urgency is likely to remain high, positioning the EV market for continued strength through the remainder of Q3.”

Research underscores the importance of the federal EV tax credit. A study by Joseph Shapiro, Hunt Allcott, and Felix Tintelnot found that removing the $7,500 incentive could reduce EV sales in the U.S. by 27%, leading to 317,000 fewer EV registrations, dropping from 1.184 million to 867,000. Shapiro emphasized that “$7,500 is not trivial” and that losing the tax credit would significantly impact this rapidly growing market.

With the IRS guidance in place, EV buyers can act now to benefit from the federal credit, helping Tesla, GM, Ford, and other manufacturers maintain strong sales momentum through Q3 2025.