Colorado announced an increase in electric vehicle rebates on October 2, 2025, following the expiration of federal EV tax credits on September 30. The state will offer up to $9,000 for new EVs and $6,000 for used models through its Vehicle Exchange Colorado program starting November 3. Governor Jared Polis stated that Colorado remains a national leader in EV adoption, with more than 200,000 electric vehicles registered statewide.[1]
Federal Tax Credits Expire
The federal government ended $7,500 tax credits for new electric vehicles and $4,000 credits for used EVs on September 30, 2025. Congress passed sweeping tax and budget legislation in July 2025 that terminated these incentives.[2] The expiration resulted in a surge of EV purchases in the third quarter of 2025 as buyers rushed to secure the credits before the deadline.[3]
Automakers Respond to Policy Shift
General Motors announced on October 8, 2025, that it would not extend federal tax credits on vehicles in transit before the expiration. Instead, GM offered approximately $6,000 in its own lease support through the end of October.[4] Hyundai stated it would provide $7,500 cash incentives in October for 2025 models to maintain sales momentum.[5]
Read More: United States Falls Further Behind in Electric Vehicle Race
Colorado Vehicle Exchange Program Expansion
The Polis Administration raised rebates through the Vehicle Exchange Colorado program effective November 3, 2025. Income-qualified residents who trade in older gasoline or diesel vehicles can receive point-of-sale rebates at participating dealerships.[6] Since the program launched in summer 2023, more than 2,700 Coloradans have traded in older vehicles to purchase or lease an EV.[7]
Program Eligibility and Requirements
Applicants must meet specific criteria to qualify for the enhanced rebates. The following requirements apply to the Vehicle Exchange Colorado program:[8]
- Household income at or below 80 percent of county median income.
- Trade in an operational gasoline or diesel vehicle at least 12 years old.
- Trade in vehicles that fail Colorado emissions standards also qualify.
- Applicants must be Colorado residents with valid driver licenses.
- New EV purchases must have an MSRP of $80,000 or less.
- Used EV purchases must have a final price of $50,000 or less.
Market Impact and State Goals
Electric vehicles represented approximately 25 percent of new vehicle sales in Colorado during early 2025, with more than 200,000 EVs registered statewide as of October 2025.[9] Colorado officials reported in August 2025 that the state now projects fewer than 600,000 EVs on roads by 2030, short of the original goal of nearly 1 million set in 2019.[10] The Colorado Energy Office secured federal funding on October 9, 2025, for expanding the state’s fast-charging network to support continued EV adoption.[11]
