The EV industry’s tax credit is gone: Now what?

The federal $7,500 EV tax credit has officially ended. With this change, there will certainly be questions around the electric vehicle (EV) industry, with many asking: What comes next for the industry?

Despite the expiration, the EV market outlook remains strong. Q3 saw Ford produce all-time highs in EV sales, and Hyundai showed a 100% increase  in YOY. OEMs are continuing to produce EVs at scale, and record EV sales occurred in Q3. Globally, the demand is still there; however, it will be interesting to see how the end of the EV tax credit impacts Q4 EV sales in the United States.

The end of this federal incentive has the potential to mark a pivotal shift in how the EV industry is perceived and continues to be adopted in the United States. Consumer demand for EVs certainly plays a role, but we also have to look at the evolving infrastructure behind EV production and ownership. As the industry enters this next chapter of vehicle evolution, we must consider the battery supply chain and in turn critical minerals. This is where battery recycling and domestic refining will play a foundational role in the industry’s future.

EV growth isn’t slowing, but the rules are changing

While consumers capitalized on the final days of the EV tax credit, data shows EV demand has gone beyond government incentives. Sales continue to rise globally, driven by improved technology and increased consumer awareness.

Sustaining growth isn’t just about producing more EVs that consumers want. It’s about ensuring the materials to build the batteries are available domestically. With the cost of electric vehicles being a barrier for some consumers, one way to potentially lower costs is to source materials for battery production domestically and reduce reliance on foreign sources of critical minerals found in EV batteries. 

A critical mineral demand is on the horizon

Demand for lithium, cobalt, and nickel isn’t just growing because of EVs. These minerals are also required to power data centers, grid-scale energy storage systems, defense systems, consumer electronics, and more.

This multi-sector demand is pushing global battery supply chains to their limits. If the U.S. hopes to meet its national security and energy goals, we must build a stable, domestic supply chain of these materials. Once the materials are within our borders, we must do everything we can to keep them here, which includes prioritizing battery recycling to extract the critical minerals to be put back into the supply chain to make new batteries.

Battery recycling offers one of the most immediate and commercially scalable ways to do that. Recycling allows us to recover valuable critical minerals already circulating in the economy, particularly from the growing wave of end-of-life EV batteries expected in the coming decade. The largest critical mineral mine is already in our junk drawers and on our roads.

Battery recycling: a short- and long-term solution to a post-tax credit market

As the EV market stabilizes in a post-credit landscape, battery recycling needs to be at the forefront when it comes to diversifying our critical mineral sources. It offers a domestic source of high-value materials, helps reduce costs for automakers, and lowers the environmental impact.

There has been strong momentum among OEMs preparing for this shift. Automakers such as Toyota are partnering with battery recyclers to secure future supply and create a closed-loop supply chain, recognizing that battery recycling is no longer just a sustainability play; it’s a supply chain strategy.

The volume of used batteries, from EVs and beyond, is growing fast. Grid storage, consumer electronics, and more are all contributing to a larger and more diverse stream of lithium batteries ready for recovery and reuse.

Strengthening domestic resilience

Relying on foreign sources for critical minerals leaves the U.S. vulnerable to a lack of supply, price volatility, and security risks. Building a sustainable supply chain through strong recycling infrastructure, domestic processing, and critical mineral refinement is essential to both short- and long-term national and economic security and global competitiveness.

Recycling isn’t just about what happens to a battery at the end of its life. It’s about creating a closed-loop supply chain that makes the U.S. EV industry more resilient, more competitive, and better prepared to scale without being held back by raw material shortages.

At the end of the day

As the critical minerals and battery industries enter a new phase, battery recycling will be essential to ensuring that progress is not only sustained but scalable. Continued investments in domestic battery recycling collection, processing, and critical mineral refinement are laying the groundwork for a more secure, resilient, and self-sufficient supply chain – one that doesn’t rely solely on foreign sources, but on smart, forward-looking infrastructure.