EV sales one year after federal tax credit ended

Key Points:

• The $7,500 federal EV tax credit was eliminated in September 2025 by a law signed by President Donald Trump, leading to a sharp decline in new electric vehicle sales in the U.S.
• Since the tax credit removal, hybrid vehicle sales have surged, increasing 23% from Q2 2025 to Q2 2026, as consumers seek fuel-efficient options amid rising gas prices above $4 per gallon.
• Automakers have shifted focus toward hybrids, with companies like Toyota, Kia, and Hyundai expanding their hybrid offerings, while some low-selling electric models were canceled due to the loss of subsidies.
• Despite the current emphasis on hybrids, major automakers such as General Motors and Ford remain committed to a future dominated by electric vehicles, though the transition is expected to be more gradual than initially projected.
• Improvements in EV technology, including increased battery range and lower battery costs, along with expanding charging infrastructure, suggest continued electrification of the market, but consumer adoption is diversifying across hybrids, used EVs, and new EVs.