A Historic Reversal
After years of explosive growth, US electric vehicle sales declined in 2025 for the first time in at least a decade. According to data from S&P Global Mobility, EV registrations fell by 0.4% compared to 2024, a stark reversal from the 11% growth recorded the previous year and the 52% surge in 2023. EV market share slipped from 8% to 7.8% of total vehicle sales, even as overall vehicle registrations across all powertrains rose 2.2%.
Federal Incentives Eliminated
The timing of the decline tells a revealing story. In the first half of 2025, before the federal EV tax credit was eliminated in September, sales were actually up 4.6% year-over-year. The removal of the incentive, which had provided up to $7,500 toward new EV purchases, dealt a significant blow to consumer demand in the second half of the year.
Rising transaction prices compounded the problem. With over 40% of new car buyers already earning more than $150,000 annually, EVs have struggled to break out of the premium buyer segment and reach mainstream consumers.
