$7,500 EV Tax Credit Ending Soon – How It Affects F-150 Lightning and Mustang Mach-E Buyers

If you’ve been considering an electric Ford like the F-150 Lightning or Mustang Mach-E, it’s time to pay attention. The recently passed federal bill is not only introducing new tax breaks, but also ending the Clean Vehicle tax credit of up to $7,500 much earlier than expected. This creates a sense of urgency for EV shoppers: there’s a shrinking window to claim that $7,500 credit before it disappears. Below, we answer common questions about the credit’s phase-out, how it impacts popular Ford EVs, and why you might want to act sooner rather than later.

Is the $7,500 Electric Vehicle Tax Credit Really Ending?

Yes – if the new bill is enacted as written, the federal EV tax credit will end much sooner than it was originally supposed to. Currently, buyers of qualifying new electric vehicles can receive up to a $7,500 credit (and used EV buyers can get up to $4,000). This was established under 2022’s Inflation Reduction Act and was slated to last until 2032. The new “Big Beautiful Bill” changes that dramatically. It “largely terminates” many green incentives and “would end tax credits for new and used electric vehicles” as soon as the law takes effectcbsnews.com.

In fact, according to multiple reports, the EV tax credit for purchasing new or used electric vehicles will expire on September 30, 2025 under the new legislation. Instead of running until 2032, it gets cut off at the end of Q3 2025. That means after that date, no federal tax credit would be available for EV purchases. This applies to both the $7,500 credit on new EVs and the $4,000 credit on used EVs.

Importantly, this isn’t just a proposal – Congress has passed the bill, and it’s expected to be signed into law, so the clock is now ticking. The writing is on the wall: the EV tax credit is ending, and much sooner than many people anticipated!

When Does the EV Tax Credit Expire and What’s the Phase-Out Plan?

The key date to remember is September 30, 2025. As long as you take delivery of a qualifying electric vehicle by that date, you should still get the credit (subject to the existing rules). But any EV purchase on October 1, 2025 or later would not be eligible for the federal credit, based on the bill’s current language. Essentially, it’s a hard cutoff, not a gradual phase-out.

This is different from how the old EV credit rules worked in the past (which phased out slowly once a manufacturer sold a certain number of EVs). Here, the cutoff is across the board for all manufacturers at the same time. There is no sliding scale reduction – it’s all or nothing depending on the date.

To summarize the timeline:

Now until Sept 30, 2025: Credit is available for qualifying new and used EV purchases (up to $7,500 for new, $4,000 for used, subject to existing income and vehicle price limits).
After Sept 30, 2025: No federal EV purchase credit available. The program is terminated as of October 1, 2025.
There were earlier versions of the bill that proposed slightly different timelines – for example, the House’s original version considered letting the credit run through end of 2025 for some automakers and even into 2026 for those under a certain sales threshold. However, the final agreed-upon plan is a firm end by Q3 2025 for everyone. In other words, there’s no guarantee it will be around in 2026, even for brands that haven’t sold many EVs yet.

How Will This Affect Ford F-150 Lightning Buyers?

A 2024 Ford F-150 Lightning – currently eligible for a $7,500 EV tax credit, but that incentive is set to vanish after September 2025.

The Ford F-150 Lightning – Ford’s popular all-electric pickup – has been a big beneficiary of the $7,500 federal EV credit. As of today, most F-150 Lightning models qualify for the full $7,500 credit, because they meet the price cap (under $80,000 for trucks) and assembly/battery sourcing requirements in the current law. For example, a 2024 F-150 Lightning XLT or Lariat purchased right now would net you the full $7,500 credit used as a down payment or claimed in taxes at year end. That’s a substantial effective discount, bringing the truck’s cost down significantly and often making the price comparable to a gasoline F-150.

If the credit goes away in late 2025, Lightning buyers will lose that $7,500 incentive for purchases after the cutoff. The same truck that effectively cost, say, $60,000 after credit will effectively cost $67,500 without it, assuming no other discounts to compensate. For many budgets, that could be a make-or-break difference.

This looming deadline creates a classic “buy now” scenario for those on the fence about an F-150 Lightning. If you’ve been eyeing one, utilizing the credit while it’s still available could save you a lot of money. The Lightning is eligible for the credit today, but if you wait too long (past September 2025), you might end up paying full price with no federal relief.

Another consideration: availability. As the deadline approaches, we anticipate demand for EVs like the Lightning could spike. Shoppers rushing to beat the credit expiration might dwindle inventories or lengthen order wait times. By acting sooner, you’ll have a better selection of trims and colors – you can pick the exact Lightning you want and ensure it’s delivered well before the cutoff. Waiting until the last minute (summer 2025) might risk inventory shortages or delays that could cause you to miss the deadline and the $7,500 savings.

What About Mustang Mach-E Lease Incentives?

The Ford Mustang Mach-E is a slightly different story. Currently, if you purchase a Mustang Mach-E outright, it does not qualify for a federal EV credit (due to battery sourcing rules that left it ineligible for the tax credit this year). However, Ford has been providing an alternative incentive: $7,500 off as a lease bonus on the Mach-E. How is that possible? It works through a loophole in the law that treats leased vehicles differently. Essentially, Ford Credit (the leasing company) can claim a commercial EV credit when they buy the car and then pass the $7,500 on to the customer as a discount on the lease. This is why you might have seen offers like “$7,500 off a Mustang Mach-E – but only if you lease it.” Ford has indeed been offering $7,500 Red Carpet Lease cash on new Mach-E leases to make up for the lost purchase credit.

Here’s the urgent news: those lease incentives will likely disappear as well if the federal credits end. The new bill terminates not just personal EV purchase credits but also the credits that leasing companies utilize for EVs. So the $7,500 lease cash on a Mach-E (or any other EV) is tied to the existence of the credit. Once the credit is gone, Ford (and other automakers) won’t have that federal money to pass through to lessees.

For Mustang Mach-E shoppers, this means the attractive lease deals we see today could dry up after September 2025. Right now, you can lease a 2025 Mach-E and effectively get up to a $7,500 discount off the price of the car via the lease incentive. That makes the Mach-E’s monthly payments much lower – in fact, leasing a Mach-E can be hundreds of dollars cheaper per month than buying, once that $7,500 is factored in. Ford has even combined that with low APR rates on leases to spur EV adoption.

If the credit ends, future Mach-E leases would lose that $7,500 cushion. The result? Higher lease payments, likely $200+ more per month based on current figures, all else equal. The bottom line is if you’re considering a Mustang Mach-E, locking in a lease while the $7,500 incentive is still on the table is highly advantageous. You could save a huge amount over the course of a 3-year lease. Many of our customers have been taking advantage of these deals – in fact, a majority of Mach-E customers chose to lease in recent quarters, precisely because of the cost savings. There is a real urgency to capitalize on this before the opportunity vanishes.

Washington State EV Sales Tax Exemption Ends Soon Too

Buyers in Washington State have an additional ticking clock to consider: the state’s sales tax exemption for electric vehicles is set to expire on July 31, 2025. Currently, Washington waives the sales tax on up to $15,000 of a qualifying new EV’s price (and up to $16,000 on a qualifying used EV). To qualify, the EV must have a MSRP of $45,000 or less for new, or $30,000 or less for used. This incentive has helped many EV buyers in Puget Sound save thousands of dollars, effectively reducing the upfront cost by roughly 10% (depending on local tax rates).

However, this state incentive is scheduled to end July 31, 2025, just shortly before the federal credit’s new deadline. After that, unless the Washington legislature extends it, buyers will have to pay full sales tax on EV purchases regardless of price. It’s worth noting that the state exemption mainly benefits lower-priced EVs (since luxury or higher-end models often exceed the price cap). For example, a base Mustang Mach-E Select, which starts around $42,000, does qualify for no sales tax on the first $15k of its price – a savings of about $1,500 to $2,000 at the register. The F-150 Lightning, with prices typically above $60k, doesn’t qualify for the state exemption due to the $45k price limit, but many plug-in hybrids and lower-cost EVs do.

For local consumers, this convergence of expiring incentives paints a clear picture: the summer of 2025 is the last chance to stack both federal and state EV incentives for maximum savings. If you purchase a qualifying EV before July 31, 2025, you could potentially pay lower Washington sales tax (on the eligible portion of the price) and still claim the $7,500 federal credit – a combined benefit that can make the difference of nearly $10,000 in total savings. After those dates, these perks evaporate.

Why You Should Act Now

In light of these changes, our advice to interested EV shoppers is to consider making your move sooner rather than later. Here’s a quick recap of why acting now makes sense:

Claim the $7,500 Federal Credit While You Can: Time is limited. Buying an EV like the F-150 Lightning now allows you to pocket a $7,500 credit before it’s gone. This significantly lowers your effective cost. Waiting too long risks missing out – come Q4 2025, that credit will likely be history.
Lock In Lease Savings on Mach-E: If a Mustang Mach-E is on your wishlist, leasing before the credit repeal can save you $7,500 off the top, courtesy of current lease incentives. Those deals will dry up once the credit is axed. Early adopters are reaping the rewards now; latecomers may find much higher lease costs.
Better Selection and Order Timing: Acting early means you can find the exact model, trim, and color you want while inventory is healthy. As the deadline nears, a surge in demand might mean less choice and longer waits. For instance, ordering a custom F-150 Lightning can take a few months for delivery – you’ll want that truck in your driveway before September 30, 2025 to confidently claim the credit. Give yourself a cushion for any production or transport delays by planning ahead.
Combine State and Federal Incentives (Washington Buyers): Through mid-2025, Washingtonians can double-dip on incentives – no state sales tax on many EVs and a federal tax credits. That dual benefit drastically improves the economics of going electric. After the cutoffs, the financial equation won’t be as favorable. It’s a classic “buy while the sale is on” scenario.
Avoid Potential Price Increases: It’s possible that, without credits, automakers might adjust EV pricing or at least scale back discounts. Right now, manufacturers know consumers factor in the credit, and they price competitively. Once incentives are gone, market dynamics change – some forecasts suggest EV prices could effectively “rise” $7,500 because that incentive buffer is removed. Beating the cutoff insulates you from this risk.

At Bowen Scarff Ford, we understand that these looming changes can feel overwhelming – buying a car is a big decision, and timing can be crucial. Our team is here to help you navigate the timeline and make sure you don’t miss out on any available savings. The sense of urgency is real, but so are the opportunities in the next year for EV buyers. Whether you’re aiming to snag a Ford F-150 Lightning with the credit or secure a sweet Mustang Mach-E lease deal before it’s too late, we’re ready to assist every step of the way.

Bottom line: the EV landscape is shifting, with incentives winding down sooner than expected. Savvy consumers in the Puget Sound region will want to capitalize on the remaining window to save $7,500 federal and more in state tax breaks. If you have questions about your eligibility, the phase-out process, or inventory availability, don’t hesitate to contact us or visit the dealership. This is a final call to take advantage of generous EV incentives – and we’re here to make sure you drive home happy and well-informed.