Tesla, Volkswagen and Chevrolet purchases are highly dependent on EV rebates: JD Powers

Many analysts predict that sales of electric vehicles will be hit should the incoming Trump administration carry out its plans to end the $7,500 federal tax incentives on EV purchases and leases.

While predictions vary, with some expecting this would lead to a 27% drop in demand for EVs, research firm J.D. Power took an extra step and asked consumers how rebates had influenced their decision to buy an EV.

J.D. Power’s study confirmed the federal tax credits have played a critical role in consumer decisions: Among premium brand EV owners, 64% say that incentives were a primary driver of their decision to purchase or lease their EV. Among mass market EV owners, 49% selected their vehicle based on tax credits and incentives.

More specifically, the survey found Volkswagen, Chevrolet, and Tesla owners were the most heavily influenced by the incentives: Tax credits and incentive programs were cited as the top reason for purchase among 81% of Volkswagen buyers, 77% of Chevrolet buyers, and 72% of Tesla buyers.

By contrast, only 32% of Hyundai buyers, 24% of Kia buyers, and 21% of Toyota buyers said tax credits and incentives were a primary reason for their vehicle selection.

The findings suggest a different impact than the one recently predicted by Tesla CEO Elon Musk, a close advisor to President-elect Donald Trump. Musk recently gave his blessings to ending federal incentives for EVs, saying the move would probably be “devastating” to Tesla competitors while only impacting his company slightly.

Several trade groups, including the Zero Emission Transportation Association (ZETA), whose members include the likes of Tesla, Waymo, Rivian, and Uber, have come out in support of keeping federal incentives for both the production and sales of EVs.

The incentives have helped domestic manufacturers of EVs and their components, such as batteries, boost job opportunities across the U.S., including in many Republican-dominated states such as Ohio, Kentucky, Michigan, and Georgia, the group says.