Marketplace Tech Car dealerships face new barriers to EV tax credits
Sep 25, 2025
With the EV tax credit deadline looming, dealerships face new IRS paperwork hurdles like the bizarre proof-of-life photo. Processing delays leave submissions in limbo, creating chaos for dealers who front credit money to buyers. Analysts predict a sharp drop in EV sales post-deadline, but the used-EV market may thrive thanks to an influx of affordable options. Competing factors could influence EV prices, including the end of subsidies and potential inventory shortages. The electric vehicle landscape is shifting rapidly!
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IRS Added Sudden Documentation Rules
- Dealers reported the IRS added new documentation requirements mid-September without warning.
- They now must upload a photo of purchase paperwork next to the vehicle identification number in the door jam.
Pending Submissions Create Cash Uncertainty
- Submissions that previously approved quickly are now marked pending with no payout timeline.
- The sudden pendings create uncertainty about when dealers will receive federal reimbursements.
Dealers Front Tax Credit Money
- Dealers described fronting the tax credit money to buyers and waiting on IRS reimbursement.
- They sell a $25,000 car for $21,000 counting on the $4,000 federal payment coming to them.