How the Top 3 Luxury Automakers Responded to EV Tax Credit Loss
The $7,500 electric vehicle (EV) federal tax credit ended September 30, 2025. The incentive was a significant driver for EV adoption, making clean vehicles more attainable to consumers. A lesser-known “lease loophole” allowed automakers to pass the incentive to lessees regardless of vehicle assembly location or income limits, a real boon for luxury brands.
With the incentive now gone, automakers are charting different paths. Here’s how the top three European luxury brands — Audi, Mercedes-Benz, and BMW — are responding in the first weeks of October.
#3: Audi — Fire Sale Over, but Demos Galore
Audi went out with a bang last quarter, offering aggressive lease support across its EV lineup in a last-minute push before the tax credit sunset. Some lessees scored Q4 e-tron and Q6 e-tron deals for under $400 per month and $600 per month, respectively.
But the party’s over. In October, Audi significantly cut back on EV incentives. Lease cash decreased, money factors increased, and residual values fell. Audi also paused allocations of electric inventory to dealers, leaving them with few EVs to sell in a post-tax credit environment.
💡 Leasehackr Tip: Looking for a deal on an Audi EV? Consider leasing a demo vehicle or service loaner. Some dealership are discounting these units heavily — we’ve seen Q4 e-tron demos for $350/month with modest drive-offs.
#2: Mercedes-Benz — Creating Its Own “EV Credit”
Mercedes is continuing to support EVs with its own incentives, offering $7,500 to $10,500 in lease cash on select EQ electric models.
However, Mercedes isn’t extending similar support to its plug-in hybrid (PHEV) models. Absent significant lease cash, these hybrids now lease for far more than their gas-powered equivalents, making the regular GLC 300, for example, an arguably more compelling financial choice than the PHEV GLC 350e.
#1: BMW — Quietly Improving Deals
BMW is taking a steadier approach, focused on maintaining EV momentum rather than short-term sales bursts.
In October, BMW adjusted its lease programs by adding lease cash and lowering money factors, offsetting the loss of the federal credit. In most cases, the BMW i4, i5, and iX now lease for less than they did in September.
BMW’s strategy signals a greater commitment in its long-term EV roadmap and a desire to keep lessees engaged through consistent pricing rather than dramatic swings.
Shopping for an electric BMW lease deal? View Pre-Negotiated Deals here, including a BMW i4 eDrive40 for well-under $500 per month.