Shifting gears
As tax credits expire, will Colorado's hot EV market hit the slow lane?

With federal tax credits for certain electric vehicles expiring Oct. 1, many would-be EV buyers have gotten off the fence to take advantage of the incentives while they can. In fact, the first half of 2025 set a record for EV sales nationwide, with 607,089 sold – a 1.5% increase over 2024, according to Cox Automotive.

And Durango car dealerships mirror that trend, saying they also have seen an uptick in EV sales and leases in recent months.

“We have seen a spike,” Greg Rowland, general manager at Morehart Murphy Regional Auto Center in Durango. “Mostly, it’s people who see the value in the electric movement, and that $7,500 is a significant driver.”

Rowland said most of the dealership’s EVs have already sold off the lot, and the scene is no different down the road at Durango Motor Company. There, salesman Chris Chism said they also have seen a surge in EV sales as well.

“Our electric Kias have been flying off the shelf. Same with our Fords,” he said. “We have definitely seen an uptick since the timeline was put on the tax credits. Most are only jumping in because of the low prices being offered."

However, some are asking if the end of the tax credits will put the brakes on the EV market in Colorado, where about 25% of vehicle sales in the last year were EVs, making it the fifth-leading state for EV adoption.

The answer, as with so many things these days: it’s complicated.

The rural-urban divide

Matthew Groves, president of the Colorado Auto Dealers Association, recently told Colorado Public Radio that fewer discounts will inevitably hurt sales and slow Colorado’s red-hot EV market, which briefly overtook California’s as the top for EV adoption last fall.

“Anything that makes cars more expensive is bad for dealers,” Groves said.

However, in La Plata County, EV adoption is a bit of a different animal, with sales numbers not coming close to those in urban areas, such as the Front Range. Rowland said EVs made up only about 2% of sales at Morehart Murphy last year, although the dealership did sell a “significant” number of hybrids. Chism echoed this sentiment.

“I wouldn’t say EVs are our biggest seller,” he said.

Rowland said lower adoption numbers here are a classic case of the rural-urban divide. Unlike the Front Range, where charging stations are more commonplace, range anxiety – the fear of running out of battery life before making it to your next charge – is more pronounced in sparsely populated areas with less charging infrastructure. Compounding that are concerns over cold weather and mountain driving conditions that take a toll on a vehicle’s battery life.

“I think range anxiety still plays a role here,” said Rowland.

Chism, who owns a Ford F150-Lightning, admits it’s “not for everybody,” but said he is happy with his EV. 

“I thoroughly enjoy driving it,” he said. “I haven’t paid for gas in nine months.”

Chism owns a farm and commutes 30 minutes one-way in his Lightning. He admits one of the biggest factors in deciding to go electric was that Durango Motor Co. recently installed fast chargers, which employees can use for free. (They are also available to the public for a fee.)  

“If I didn’t have the amenities here, the Lightning probably wouldn't work for me,” he said.

And while driving an EV may be better on the pocketbook and planet, Chism said it does require a different approach to travel, as he and his wife learned on a recent cross-country road trip.

“You learn to travel a little differently. Instead of driving until you need to fill up the tank, you go until you get to a charge station and charge enough to get to the next charging station,” he said. “If you’re a laid-back traveler, it works. It’s definitely not impossible.”

A road less traveled

Both Rowland and Chism admit the future of EVs is a bit murky, with Colorado’s own state tax credit set to decline to $750 at the start of 2026 and tariffs and interest rates playing uncertain roles.

“That’s the question: what’s going to happen? Are manufacturers going to help subsidize? Is it going to move people back to gas/hybrid models? What exactly does that look like?” Rowland conjectured.

However, both he and Chism say this is not by any means the end of the road for EVs. “EVs have made their presence, and I don’t think they’re going anywhere anytime soon, especially since all the future technology is supposed to increase the range and give less anxiety and more options,” said Chism.

Rowland said he doesn’t expect car manufacturers to stop making EVs, either.

“The manufacturers, in my opinion, want a product line for every individual,” he said. “So, you’re going to see electric vehicles, you’re going to see hybrid vehicles, you’re going to see gas vehicles. So, if somebody's in the market, they have options.”

Amy Hunter Wright, a spokesperson for the National Auto Dealers Association, told Colorado Public Radio that her organization supported a “longer phaseout” for the federal incentive. However, she said the organization expects EV sales will continue to rise, even without the incentives.

Chism agrees that the end of the federal tax credits won’t be the precipitous cliff some think it will be. For starters, the federal tax credit only applied to vehicles manufactured in North America that cost less than $80,000, which excludes a lot of electric vehicles on the market. In addition, many manufacturers offer rebates on models that don’t qualify for the tax credits.

“For example, Kias aren’t made in North America, but they know people want that incentive, so they are adding it on as a rebate,” Chism said. “Ford also offers specific VIN rebates for its vehicles that aren’t subject to the tax credit, so essentially, you’re getting the same thing in a different form.”

In addition, Ford is offering 0% financing on Lightnings, something they did last year at this time for the end of the model year.

In other words, the deals will still be there, you just may need to look a little harder.

And if you’re still on the fence, Rowland said leasing an EV is another popular – and practical – option in these uncertain times.

“Most of our EV customers have been leasing,” he said. “Some EVs may have a 180-200 mile range, with some of the bigger trucks getting up to the 375-400-mile range. But with that range, obviously, price starts to factor in. That’s why leasing makes a whole lot of sense. You can lease some of these cars for a pretty reasonable monthly payment and not take the risk of what the car’s going to look like three years down the road.”

Ed Olsen, sales manager at Boulder Nissan, helped pioneer the concept of rock-bottom EV leases in Colorado last summer when he offered an all-electric Nissan Leaf for $9 a month. 

Olsen told Colorado Public Radio that his sales team struggled to keep up with demand. In the showroom, a picture shows staff gathered around a sign reading “251,” the all-time monthly sales record set by the dealership in December 2024. 

He’s now trying to ride that out as long as he can. In early August, his lot was packed bumper-to-bumper with more than 100 Nissan Ariyas, an all-electric SUV available to lease for $179 a month.

Olsen hopes to sell or lease all of them by Sept. 30. But after that, he expects his dealership will return to its old business model: selling mostly gas-powered cars and used vehicles. 

“It's been such a good ride over the last year and a half or so,” Olsen said.

Colorado Public Radio reporter Sam Brasch contributed to this story. For more from CPR, go to: www.cpr.org.