A major consideration for buyers of electric vehicles is the tax credit incentive. Shoppers are currently able to factor in a $7,500 credit for new electric vehicles (with a purchase price of up to $80,000 USD) and a $4,000 credit for used ones. However, recent legislation will eliminate these incentives after September 30th. Notably, the decision could impede Cadillac EV sales performance, which is currently seeing record growth.
In addition to slashing the aforementioned consumer credits, the One Big Beautiful Bill Act (OBBBA) also cuts penalties for automakers that fail to meet Corporate Average Fuel Economy (CAFE) standards.
As reported by Automotive News, the National Automobile Dealers Association (NADA) had urged Congress to keep the credits in place as a means of decreasing EV inventory.
“Dealers are still carrying a high EV inventory with approximately 140,000 EVs currently on dealer lots,” NADA stated. “If EV tax credits are going to be repealed, NADA urges Congress to include a reasonable transition period.”
Although the aforementioned legislation includes a battery production tax credit specifically structured to exclude Chinese firms, which continue to lead in battery production and electric vehicle sales globally, the change could still potentially cause Cadillac to lose its current EV sales momentum. It’s worth highlighting the fact that Cadillac President John Roth recently shared that Cadillac is earning conquest sales from Tesla, Mercedes, Audi, Lexus, and BMW, enabling the luxury marque to deliver strong sales results. For instance, Cadillac Q2 sales were its best Q2 since 2017.
| MODEL | Q2 2025 / Q2 2024 | Q2 2025 | Q2 2024 | YTD 2025 / YTD 2024 | YTD 2025 | YTD 2024 |
|---|---|---|---|---|---|---|
| CT4 | -19.12% | 1,430 | 1,768 | -24.50% | 2,644 | 3,502 |
| CT5 | +9.01% | 4,187 | 3,841 | +19.02% | 8,168 | 6,863 |
| ESCALADE | +16.12% | 11,692 | 10,069 | +26.93% | 24,375 | 19,204 |
| ESCALADE IQ | * | 1,810 | * | * | 3,766 | 0 |
| LYRIQ | -31.22% | 5,017 | 7,294 | -28.85% | 9,317 | 13,094 |
| OPTIQ | * | 3,224 | * | * | 4,940 | 0 |
| VISTIQ | * | 1,744 | * | * | 1,745 | 0 |
| XT4 | -22.20% | 4,010 | 5,154 | -12.44% | 8,785 | 10,033 |
| XT5 | +8.22% | 6,374 | 5,890 | +4.62% | 12,727 | 12,165 |
| XT6 | +9.46% | 4,859 | 4,439 | +6.55% | 9,637 | 9,045 |
| CADILLAC TOTAL | +15.32% | 44,347 | 38,455 | +16.50% | 86,104 | 73,906 |
According to a report from Reuters, the Electrification Coalition, an electric vehicle nonprofit group, claims that discontinuing EV tax credits could stall domestic electric vehicle adoption and hinder the U.S.’s ability to compete globally. This would achieve the opposite desired effect, which is to reinforce domestic supply chains. Additionally, clean transportation non-profit Calstart says that deleting the electric vehicle tax credit will jeopardize American jobs tied to the clean vehicle economy.
As the political pendulum swings, manufacturers and consumers are both caught in the middle. Trying to adapt to the ever-changing landscape has become much more challenging in recent times as the auto industry evolves and the use of renewable energy becomes more of a priority.
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