Jon Muller is a semi-retired policy analyst and energy consultant.

I’ve been looking to buy an EV for a long time. This week, I bought a 2022 Chevy Bolt EUV with 21,000 miles. It has about five more years of battery warranty. EV Tax credits are not likely to survive the new year. The primary beneficiaries of the end of EV tax credits will be people who bought them before January 1, 2025.

First, the specifics. The vehicle cost about $21,000. I received a $4,000 tax credit, which was taken off the price of the vehicle. More on the tax rules later in the piece. The net cost of the vehicle to me was about $17,000. The original new price was about $35,000.

I evaluated the total cost of ownership and factored in the impact of no future EV subsidies.

President-elect Donald Trump’s key advisor is Elon Musk, who both owns an EV company and also wants to end EV subsidies. Tesla makes a profit in the current environment, and will continue to do so in a non-subsidized environment. Musk has stated, probably correctly, that the end of subsidies will cause far more damage to his American competitors, GM and Ford, than to Tesla.

If you believe the incoming Congress and Trump administration will end subsidies, now is the perfect time to buy an EV. It’s a function of how the individual’s balance sheet is impacted by subsidies.

Under current law, you receive a $7,500 tax credit for buying a qualified new EV. I won’t get into which are qualified, but there are a lot of them. Here’s why I haven’t bought one in the past, and what so many people misunderstand about the nature of subsidies.

When you buy a new EV for, say, $50,000, you only pay $42,500 thanks to the tax credit. You think you saved $7,500. But you didn’t. The value of your car depreciated $7,500 the minute you bought it. Forget about the depreciation when you drive it off the lot. This depreciation happened before you ever got in the driver’s seat.

Why? Because the value of your car is instantly compared to a brand new car. No one would buy a used car with 10 miles on it for $42,500 when they can buy a brand new $50,000 car for $42,500 (after tax credit). You never really got the subsidy to begin with. You just traded down the value of your asset for cash from the government. You broke even.

There have been any number of articles written about the rapid depreciation of EVs, and the effect is real. Some of it is clearly due to the rapid improvement in quality, range, presence of charging stations, growing confidence. But most of it is due to the subsidy. You think you got something you never got. You got the cash, but you lost the value. It’s no kind of deal unless you drive it to the bitter end.

This is further complicated by an additional $4,000 tax credit available for people who buy a used EV. It comes with limitations. You can’t get the used car credit if you make more than $150,000 in modified adjusted gross income. The price of the car has to be less than $25,000. And it’s not a refundable credit. The tax credit is the minimum of $4,000 or the taxes you owe.

There’s a loophole. The IRS enabled dealers to take the value of the tax credit off your purchase price. So when I bought a $21,000 car, they only charged me $17,000. The IRS pays the dealer the other $4,000. I still have to file it on my tax return. If my modified adjusted gross income is greater than $150,000, the IRS claws back my credit. So if you’re truly rich rather than merely affluent, this doesn’t work. But then again, if you’re truly rich rather than merely affluent, you’re not buying a 3-year old Chevy Bolt.

That’s where the loophole kicks in. Even if you have no tax liability, the IRS will not claw back the credit. If you buy from a dealer that will not process the tax credit for you, you are limited by your actual tax liability when you file your taxes. If your total tax liability is $1,000, you can only get a $1,000 tax credit. If the dealer files the tax credit for you, there is no claw back provision. You get the full $4,000 credit. If you buy from a private party, there is no tax credit at all.

If the tax credits are repealed, there will be no impact on your balance sheet. The credit will not reduce the value of your vehicle if the government eliminates the credits. That’s why I bought one this week.

The tax credits may well be repealed retroactive to January 1, 2025. Absent some clear directive from policy makers, anyone who buys an EV on January 2, 2025 thinking they’ll get a tax credit will be a foolish shopper.

On the other hand, if you buy one today, your tax credit is solid. And that’s where the magic kicks in. Remember when I said your $50,000 car was worth only $42,500 the minute you signed the paper? If you believe the government will end subsidies, the value of your car goes back up. If you still haven’t driven it off the lot in six months, you’re $7,500 richer.

Take my recent purchase. I paid $17,000 for a $21,000 car. But that $21,000 car was in a market compared to brand new EVs with eligible $7,500 tax credits. Once that subsidy disappears, my $21,000 car will be compared to a $35,000 new car instead of a $27,500 new car.

If the used car subsidy continues, my $21,000 car is now worth $17,000. Just like tax credit harvesters in the past, I can’t resell my used car for more than someone would pay at a dealer after-tax credit.

And this is where a rational expectations believer comes face to face with his own myths. Think about it. We’ve established that the first buyer of a subsidized car doesn’t really enjoy the benefit, at least not much of it. He just trades future asset value for cash. The dealer didn’t get the benefit. The dealer bought the car from the manufacturer and marked it up the same as any other car. But the government did indeed spend $7,500.

So where did the money go? It went to the person who buys the used EV. When subsidies end, the subsidy chain of benefits is enjoyed by all current owners of EVs.

My sense is, the price of new EVs will come down a little bit, but not appreciably when the subsidies are lifted. The price of used EVs will immediately go up. The $21,000 car I paid $17,000 for will be worth something closer to $25,000. I end up getting the benefit of both the original $7,500 tax credit and also the $4,000 used credit. And the subsidy wheel stops turning.

The great irony of this anti-EV administration may well be a surge in EV purchases, if only people knew the opportunity this moment affords.

There are all kinds of other reasons to buy one, especially if you live where I live. For eight months a year, my cost of fuel is about 4.5 cents per kWh. The other four months, it’s about a dime. The car gets about 2.9 miles per kWH, at the low end. That suggests a weighted average cost of 2.1 cents per mile. That compares to an ICE vehicle at $2.75/gallon of 9.2 cents per mile assuming 30/mpg. It’s a savings of $700/year on 10,000 miles.

Brakes never need to be repaired. No oil changes. Windshield wipers and tires, that’s about it.

There may well be a better time to buy an EV than today. The time will come, in my ordinary expected lifetime, when no one will prefer an internal combustion engine vehicle, except for nostalgia or culture. That may be years from now, if it ever happens. You have a window of opportunity before the new year to buy an EV, increase your net worth, and decrease your expense. Those conditions don’t come along every day.

One more thing: I’m not a CPA. As always, never hurts to consult one if you’re looking to take this step.