As federal tax credits for electric vehicles begin to phase out, dealers across the country are bracing for a shift in consumer behavior and sales performance. In this episode of Inside Automotive, Jim Fitzpatrick checks in with Tim Hovik, dealer principal of San Tan Ford, to discuss how these changes are already affecting his operations and what strategies his team is using to maintain momentum in EV sales. Hovik, who previously set a national EV sales record at his store, shares practical insights on consumer behavior, inventory challenges, and future demand expectations.
The rollback of EV tax credits is already influencing the car-buying process, with the $7,500 federal incentive playing a role in nearly every electric vehicle purchase, even if it wasn’t the primary motivator. With the credit set to expire at the end of September, dealerships face the dual challenge of encouraging buyers to act now without discouraging those who may miss the deadline.
San Tan Ford currently has a few hundred EVs on the ground. Recent customer inquiries, including a local pool company planning to buy three Ford Lightnings, reflect growing awareness of the deadline. As the word continues to spread, more customers are expected to act quickly to avoid losing the financial benefit.
"We're always adjusting to something. We adjusted to the microchips and to COVID. We're going to adjust to different tax credits and different incentives, and we'll move forward."
Used EV inventory remains low, mainly because most early EV buyers are trading in internal combustion vehicles. Many EVs are still on short-term leases, and a surge in off-lease volume is expected over the next two years. That influx will significantly impact the used EV market as these vehicles hit auctions and dealership lots.
EV leasing at San Tan Ford is running at 65%—well above the store’s overall 15% lease penetration. For the Mustang Mach-E, 80% of transactions are leases. Until now, lenders factored in the commercial-use EV tax credit to lower lease costs. Without that contribution, monthly payments could rise substantially unless manufacturers introduce new incentives. The credit itself amounts to several hundred dollars in savings per month when spread across a typical 36-month lease.
EVs account for 20% of San Tan’s new vehicle sales, a rate higher than many non-ZEV state dealers. That success stems from positioning EVs as quality vehicles with a different propulsion system, rather than marketing them solely on their electric powertrain. Matching customers to the right vehicle based on lifestyle and driving habits remains central to the store’s approach.
Roughly 10% of the dealership’s salespeople drive EVs, compared to 50% of the management team. To improve EV selling confidence, Hovik hired an EV specialist from the electric power industry. That specialist supports the sales team and helps close knowledge gaps when engaging with highly informed EV shoppers.
Hovik expects EV sales to continue growing year over year, though at a more moderate pace than many predicted several years ago. Current trends show gradual adoption, often through “split garages,” where households own both an EV and a gas-powered vehicle. Early lease returns have been positive, with all recent EV customers at lease-end choosing to stay with electric.
San Tan Ford continues to market EV inventory aggressively, while also preparing for a new environment where tax credits no longer drive demand. Future growth will rely more on competitive pricing, targeted incentives, and accurate customer alignment than on government support.
"We're always adjusting to something. We adjusted to the microchips and to COVID. We're going to adjust to different tax credits and different incentives, and we'll move forward."
