EV Demand Faces Reality Check as Tax Credits End, Production Adjustments Mount
DETROIT – September 29, 2025 – The U.S. electric vehicle market is poised for a critical test as federal tax credits for many EV purchases expire, coinciding with production adjustments from major automakers signaling a potential slowdown in the rapid growth of EV adoption.
Honda has announced it will end U.S. production of its Acura ZDX electric crossover, previously manufactured by GM in Tennessee. This decision comes as GM itself implements downtime at plants, cuts upcoming production shifts, and slows the rollout of several EV models.
Other manufacturers are also recalibrating their EV strategies. volkswagen, Porsche, and Rivian Automotive have all announced changes to their EV plans or reductions in workforces related to electric vehicles.
“EVs are not going away … but it’s not going to be a linear increase that we’ve seen over the last couple years, like we’re in for a short-term dip,” said Steve Horaney, senior vice president of the MEMA Original Equipment Suppliers, during the Move America event on wednesday.
Despite the shifting landscape, new EV models are still slated for release. Nissan is preparing to launch a redesigned Nissan Leaf – the first mainstream EV offered in the U.S., initially released in 2010. Nissan officials acknowledge the timing of the tax credit expiration alongside the Leaf’s fall release is “tough,” but believe the vehicle’s starting price of around $30,000 will remain attractive to buyers.
Industry analysts suggest that more affordable EVs will be crucial for sustaining consumer interest following the elimination of the tax credits. “The arrival of truly affordable models is so critical,” said Valdez Streaty, adding that upcoming EVs from GM and Ford Motor “could reshape the market.”