• The latest data from J.D. Power shows that tax credits are the most motivating people to buy Volkswagen, Chevrolet and Tesla EVs.
• Hyundai, Kia and Toyota EV buyers were among the least motivated by tax credits alone.
• Losing the credits is expected to hurt U.S. EV sales at least somewhat.

President-elect Donald Trump vowed to repeal electric vehicle tax credits It was initiated by the Inflation Reduction Act, but this move is surprisingly supported by his new friend-adviser.campaign financier Elon Musk. But a new study from J.D. Power shows that Tesla’s sales could actually take a hit if these credits disappear.

Automotive industry marketing research firm’s latest E-Vision Intelligence Report There’s some fascinating new data on which automakers benefit most from tax credits, up to $7,500 off price Purchase or lease of a new electric vehicle if certain conditions are met. Big winners: Volkswagen, Chevrolet and Tesla, respectively.

“Among all EV purchase drivers, tax credits and incentive programs are the most frequently chosen reason to purchase among Volkswagen (81%), Chevrolet (77%) and Tesla (72%) buyers,” the study said. The report was based on a survey of new car buyers but interestingly does not include Tesla Cybertruck, Polestar and Rivian owners.

Because the IRA is intended to encourage domestic manufacturing, EVs and their batteries in general must be manufactured in North America to qualify for EV tax credits.

According to the survey, the “premium vehicle segment”, which includes all Tesla models, benefited the most from tax credits. This, criticism It also makes sense that tax revenues essentially help rich people buy expensive cars; EVs are more expensive than their gas-powered counterparts for now, and cheaper, more mainstream models are just starting to hit the market after years of being limited to the higher end of things. In the “premium” arena, “64% of EV owners say tax credits and other incentives influence their purchasing decisions. In the mass-market segment, 49% of EV owners are influenced by tax credits and incentives.” It appears that Tesla’s inclusion as a “premium” brand also helped skew the data in this direction.

After all, a Volkswagen ID.4 can now be purchased at fairly common prices, and all Chevrolet’s EVs Depending on equipment and trim levels, they represent large values ​​that are not far off from their gas-powered counterparts. Therefore, it can be argued that tax credits have succeeded in moving the EV industry to more normal pricing levels; Prices will continue to fall as EV sales increase and the battery supply chain grows.

The numbers are fascinating: “64% of premium brand electric vehicle owners say tax credits and other incentives are a key factor in their decision to buy or lease an electric vehicle,” he said. “49% of mass-market EV owners selected their vehicles based on tax credits and incentives. Industrywide, 87% of all EVs purchased or leased in 2024 received the federal EV tax credit.”

Plus, tax credits help people save money at a time when new car prices are skyrocketing and everyone is missing out on grocery prices. “Consumers who purchased or leased a new EV in 2024 saved an average of $5,124 thanks to federal EV tax incentives,” the study said. “This was $4,302 in 2023 and $1,629 in 2022. The average amount claimed in federal tax incentives for EV leases in 2024 was $6,696 and $4,257 for sales.”

So whose buyers were least motivated by EV tax credits? According to JD Power, these will be Toyota, Hyundai and Kia; A really interesting result. None of the Asian automakers produce their electric vehicles in America (though this is now changing with new technologies). Kia EV9, Hyundai Ioniq 5 and others) and therefore do not qualify for tax credits unless they are rented. One-fifth to one-third of buyers of these brands said they were motivated by tax credits. In the case of Hyundai and Kia, electric vehicles have also benefited from aggressive manufacturer and dealer discounts. This all lines up with what we already know: Most Hyundai and Kia EVs are leasedand may explain why executives at Korean automakers say so They are not worried about sales falling if they lose their credit.

The study also confirms something we’ve been hearing for the past few years: that the EV tax credit plan is confusing for many buyers, and they likely aren’t getting much help navigating it from their dealers. “43 percent of electric vehicle customers say they would describe their understanding of current EV incentives as ‘unclear,’ ‘minimal,’ or ‘don’t know,'” the survey said. “Only 17% say they have a ‘strong’ understanding of EV incentives.”

There are a few things we can take away from all this data. First, this is another data point that refutes Musk’s claim that losing tax credits “probably actually helps Tesla” in the long run, unless he’s confident the industry would completely collapse without the IRA. Second, Losing tax credits would likely reset the calculus the entire auto industry has been working on for the past few years. And finally, This is further proof that tax credits help both move metal and save people money. “Having that extra incentive was enough to convince people to buy electric vehicles,” said Brent Gruber, general manager of J.D. Power’s EV practice. Automotive News. “It wasn’t just the price.”

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