The $7,500 electric vehicle (EV) tax credit is no more.
It expired at midnight on Tuesday night, and the U.S. auto industry is bracing for a slump in demand. Without the additional $7,500 to make EVs more affordable, Ford (F 3.52%) CEO Jim Farley expects that demand for the battery-powered vehicles will be cut in half.
But it's not all bad news for automakers, even EV makers. Here are three stocks of EV manufacturers that could still succeed without the government incentives.
Image source: Getty Images.
The EV maker that's not priced like one
Even without additional tax incentives, Tesla's (TSLA -1.41%) stock could still be a winner.
That's because shares of the world's largest EV manufacturer seem largely immune to sales declines. In first-quarter 2025, the company delivered 336,681 vehicles, a 13% year-over-year decline (and its first year-over-year delivery decline ever). In second-quarter 2025, the year-over-year decline was even worse, with 384,122 vehicle deliveries, down 13.5% from the prior-year quarter. Meanwhile, its latest release, the Cybertruck, represents a minimal number of those sales (fewer than 10,000 each quarter). In spite of that, the company's shares are up 14% year to date, and its valuation hasn't suffered at all.
The company's trailing price-to-sales (P/S) ratio of 17.4 is orders of magnitude higher than automakers that sell millions of cars each quarter. That includes Toyota (TM 2.08%), which trades at 0.78x trailing sales, and Volkswagen (VWAGY 0.17%), which trades at a minuscule 0.16x. In fact, Tesla's P/S ratio today is even higher than its five-year average of 13.4x.
Tesla's stock price resilience even in the face of sales declines likely indicates that investors are placing more value on the company's bets on future technologies, like self-driving robotaxis and autonomous humanoid robots, than on its continued dominance in the now-crowded electric vehicle market. Sales declines resulting from a loss of the tax credit are unlikely to change that pattern.
The EV maker that can't be affected
Electric vehicle maker Nio (NIO -2.47%) won't lose a single sale because of the tax credit expiration. That's because it doesn't sell its cars in the U.S. to begin with.
Nio is one of the Chinese electric vehicle makers founded by William Li, and the bulk of its sales are in its native China, but it is starting to sell its vehicles in European markets as well. It's already established sales and service networks in Germany, the Netherlands, Norway, Sweden, and Denmark, and just announced plans to expand into seven additional European countries, including Austria and Poland.
Because demand for EVs is stronger in China and Europe than in the U.S., Nio has a distinct advantage over companies for which the U.S. is their largest market. Additionally, Nio has been aggressively competing with its rivals on price. It's offering its new Onvo L90 electric SUV for just $37,000, or a mere $25,000 with a subscription to its battery-as-a-service (BaaS) plan. This plan allows users to swap out depleted battery packs for full ones without needing to wait for them to charge.
That's a competitive price on an in-demand model without any tax credit required.
The EV maker that barely makes EVs
Of all the major car companies, Toyota was perhaps the most reluctant to offer all-electric models. It preferred to double down on its successful hybrid technology, which is now available across most of its vehicle lineup. In fact, the latest models of the Toyota Sienna minivan and the Camry sedan are hybrid-only in the U.S. market. Hybrid vehicles were never eligible for the EV tax credit, so the bulk of Toyota's lineup should be unaffected.
Toyota did eventually enter the U.S. EV market in late 2022 with its bZ SUV, but it's sold only about 35,000 of them in the U.S. since then, including 18,570 in 2024. Because they were manufactured in Japan, however, they only qualified for the tax credit if they were leased and not bought. Toyota has announced plans to ramp up its U.S. EV manufacturing capacity by manufacturing two fully electric three-row SUVs at its massive Kentucky plant. Slumping U.S. EV sales could complicate that plan, but in terms of existing sales, the company will barely be affected by the tax credit expiration at all.
Toyota's share price is down slightly year to date, in contrast to most other major automaker stocks. It also sports a 3.2% dividend yield, making it a comparatively safe bet for capital preservation in an uncertain industry.
