Before federal EV tax credits expire at the end of this month, dealers are seeing an influx of customers — but many worry payments from the IRS may be delayed.
In just a few days, the federal tax credit for electric vehicles — which knocks several thousand dollars off the price of many new or used EVs for qualified buyers — will be history. 
A few years ago, Democrats in Congress and former President Joe Biden expanded the credits. But the GOP tax and spending bill President Trump signed over the summer terminates them on September 30.
That’s caused a surge in EV sales over the past few months as consumers try to get in on the credits before they end. EV sales in the U.S. hit a record in August, according to Cox Automotive. But just as dealers try to handle the influx of buyers, many say they’re running into new hurdles from the IRS. 
Dealers who specialize in EVs say business has been booming ever since the passage of the “One Big Beautiful Bill Act” in July.
“July, August, September, have all been just tremendous months,” said John Foley, who runs Recharged, a dealership in Richmond, Virginia.
“I'm getting five times the normal traffic,” said Dan Eldoueihi, owner of 1A Auto Sales outside of Boston.
Jesse Lore, owner of Green Wave Electric Vehicles in North Hampton, New Hampshire, said August was his company’s “best month ever. We helped 69 families go electric in our communities.”
And Alex Lawrence, who owns EV Auto, a dealership with locations in Utah and Tennessee described the past few months as “a very steady stream of super busy.” 
All of these dealers run companies that sell used electric vehicles, which were made eligible for a $4,000 federal tax credit under the 2022 Inflation Reduction Act, if they’re sold for under $25,000.
Ever since January of 2024, buyers have been able to claim that credit at the point of sale. So, instead of waiting until they file their taxes, a customer can apply the credit to the cost of the car upfront. Customers attest that they’re qualified for the credit, dealers input sale information into an online portal administered by the Internal Revenue Service, and the federal government sends the funds straight to the dealer.
Scott Case, the CEO of Recurrent, a company that keeps track of the EV market and works with hundreds of dealers around the country, said until recently, this system worked pretty seamlessly.
“The dealer makes the sale, uploads the information into the IRS portal, and within a couple of days, they get paid out from Treasury,” Case said.
But in mid-September, Case and all four dealers quoted in this story said that process changed without warning.
First, the IRS portal suddenly required new information for each sale, including a photo of each vehicle’s proof of purchase document held up next to its vehicle identification number in the car’s door jamb.
“You kind of have to do it in a proof-of-life-style picture,” Case explained.
Then, dealers said, the IRS began marking every sale they submitted as “pending.”
“Rather than getting accepted and processed and then paid out in a timely way, they're all getting, sort of like by default, shifted into this pending status,” Case said.
After previously receiving nearly immediate approvals through the IRS portal and payments within days, dealers were surprised by this change. It’s left them unsure when they’ll be reimbursed for the thousands of dollars they’re passing on to customers for each EV sale. Some fear they might not see the money for months — or at all. And they’re frustrated.
“We're being asked to do all these things during the last two weeks of the credit when it's going to be the craziest and the busiest,” said Alex Lawrence at EV Auto. “What a horrible time to change your process.”
An IRS spokesperson reached by “Marketplace” did not provide comment after multiple requests.
In August, the IRS published an FAQ stating that EVs “acquired” by September 30 will be eligible for the tax credits, meaning a buyer doesn’t necessarily need to have the vehicle in their possession, but must have submitted a payment and have a written binding contract by the end of the month to claim the credit.
Dealers are now weighing just how many more tax credit-eligible cars they’re willing to sell.
“I'm pretty sure I'll get reimbursed, but how long it takes — that's the question,” said Dan Eldoueihi of 1A Auto Sales. He plans to cut off sales when the IRS owes him $100,000 worth of tax credits. As of Monday, he said he had four cars to go to hit that number.
“It's our livelihood too,” he said. “So, if there's $100,000 I have to chase for six months, I mean, that's not easy for anyone.”
If the tax credit payments don’t come through soon, Jesse Lore at GreenWave Electric is worried about a cash crunch.
“$4,000 is a lot of money,” he said “It is higher, larger than the profit margin that we make on any one of these vehicles.”
Lore said he buys his inventory of used EVs using a line of credit which he has to repay every time he sells a car. But if that federal money doesn’t come through, “It goes from being a sale that helps us continue our work and our mission to a sale that costs us money to complete.”
Meanwhile, John Foley of Recharged plans to sell as many cars as he can in the tax credit’s final days.
“Is it frustrating that I'm going to have to rely on the IRS to make good on all of this? Yes. But I think that's just a risk I'm willing to take,” he said.
In part, because he thinks his business will keep thriving after September 30. All of the new EVs sold over the past few years, he said, mean the supply of used EVs will stay strong. He thinks demand will hold up well too.
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