Experts believed that the now-discontinued EV tax credit would harm electric vehicle sales. Now, J.D. Power forecasts that EV sales have plummeted by up to 43% in October. And the electric vehicle tax credit is to blame for the precipitous drop.

EV sales freefall by around 43% as the $7,500 federal tax credit dries up

If you purchased a new EV earlier this year, you likely qualified for a hefty federal tax credit. As of the end of September, the government stopped offering a $7,500 tax credit for qualifying electric cars, trucks, and SUVs.

The credit significantly deferred the cost of entry for EV adopters, making a battery electric vehicle like the Nissan LEAF or Tesla Model Y much more affordable for new buyers. All in all, American buyers saved over three billion dollars using the tax credits during its 17-year run.

The incipient end of the tax credit in September did, however, boost EV sales in September. According to J.D. Power, “The expiration of federal EV credits on Sept. 30 caused EV shoppers to pull ahead their purchases, driving a significant increase in EV sales and inflating the overall industry sales pace,” said Thomas King at J.D. Power. “In September, EVs accounted for 12.9% of new-vehicle retail sales, the highest ever, and well above the 8.5% recorded a year earlier.”

But now the federal tax credit is no more, and American electric vehicle sales are feeling the squeeze. Projections put EV sales down 43% in October, one of the largest-ever year-over-year declines.

Analysts, however, believe that the impact could have been worse. Despite the sharp deterioration in EV sales, the decline could have been worse,” King said in a press release. “Actions by multiple manufacturers to reduce EV prices and increase discounts to offset the loss of the federal credit are helping to maintain EV affordability, thereby preventing an even larger decline in EV sales.”