2025 U.S. Electric Vehicle Sales: A Year of Transition and Challenges

In 2025, the U.S. electric vehicle (EV) market experienced a notable decline in sales during the fourth quarter, following a record-breaking third quarter. According to estimates from Cox Automotive, a total of 1,275,714 electric vehicles were sold in the U.S. for the year, representing a 2% decrease from 2024's sales of 1,301,441 units. Despite this decline, EVs accounted for 7.8% of total new-car sales, down from 8.1% in 2024.

USA TodayDespite Q4 Collapse, 2025 EV Sales Decline Only 2% Versus 2024; Policy Shifts, New Product Set Stage for Next ChapterTesla Still Commands Nearly 60% of U.S. EV Sales Despite Q4 SlowdownEV sales in the US plummet – as expected

The expiration of the $7,500 federal tax credit at the end of September 2025 significantly impacted sales, leading to a rush of purchases in the third quarter before the incentive ended. This resulted in a sharp drop in sales in the fourth quarter, where only 234,171 EVs were sold, a 36% decrease compared to the same period in 2024.

EV sales in the US plummet – as expected

Tesla maintained its dominance in the U.S. EV market, selling 589,160 vehicles in 2025, which accounted for 46.2% of total EV sales. The Tesla Model Y was the best-selling EV, with 357,528 units sold, followed by the Model 3 at 192,440 units. Despite a 7% decline in sales from the previous year, Tesla's market share surged to 58.9% in Q4.

BenzingaTesla Still Commands Nearly 60% of U.S. EV Sales Despite Q4 SlowdownElectrekTeslarati

General Motors (GM) emerged as the second-largest EV seller, with sales increasing by 48% to 169,887 units, thanks to popular models like the Chevrolet Equinox EV and Cadillac Lyriq. Other notable brands included Hyundai, with 65,717 units sold, and Ford, which sold 27,307 units of the F-150 Lightning, marking it as the best-selling electric pickup truck.

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The end of federal incentives has led to a structural shift in the EV market, with manufacturers needing to adapt to a landscape driven more by consumer choice rather than government support. Analysts predict that the EV market share will stabilize around 8% in 2026, supported by new models and improved charging infrastructure.

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However, many automakers, including Ford and GM, have faced significant financial challenges, leading to production cuts and strategic shifts towards hybrid and internal combustion vehicles. Ford, for instance, announced a $20 billion write-down on its EV business, while GM took a $6 billion charge related to scaling back its EV plans.

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Despite Tesla's market leadership, consumer enthusiasm for EVs appears to be waning. A Deloitte survey indicated that only 7% of U.S. respondents considered a battery electric vehicle as their next purchase, with many expressing concerns over price, charging infrastructure, and driving range. The expiration of the tax credit has further complicated the landscape, as consumers become increasingly cost-conscious.

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As the U.S. EV market transitions into 2026, the focus will likely shift towards affordability and consumer preferences. With over 30 new EV models expected to launch, automakers are preparing for a competitive landscape, while the expansion of charging infrastructure remains critical for future growth. The ongoing evolution of the EV market will depend on how manufacturers adapt to these challenges and consumer demands in the coming years.

Despite Q4 Collapse, 2025 EV Sales Decline Only 2% Versus 2024; Policy Shifts, New Product Set Stage for Next Chapter