- Cox Automotive says US electric vehicle sales will decline 2.1% in 2025.
- In this decade, electric vehicle sales have soared as more models hit the market and awareness increases.
- The surprise policy puts an end to this growth story in 2025. What comes next?
This has been a tough year for the electric vehicle industry in the United States. People rushed to buy electric cars this summer and fall before The $7,500 tax credit has expiredResulting in a record third quarter in which more than 400,000 Americans purchased electric vehicles.
Once this long-standing policy was removed on September 30, thanks to Republicans’ “big, beautiful bill,” demand for and market share of electric vehicles in this country plummeted. Now we have a good idea of what net electric vehicle sales will be in 2025, thanks to estimates Cox Automotive Out this week.
After years of impressive growth, the company says U.S. electric vehicle sales are on track to decline slightly this year. Preliminary data indicates that 230,000 electric vehicles will be sold by the end of the fourth quarter of 2025, a decrease of 46% from the third quarter and a decrease of 37% year-on-year. The share of electric vehicles in the automobile market decreased to 5.7% in this quarter.
US electric vehicle sales 2020-2025
Photography: Tim Levin/InsideEVs
Last year, Americans bought a record 1.3 million electric cars. Cox expects that to decline 2.1% to about 1.275 million in 2025. The company says 7.8% of all cars sold this year will be battery powered, down from 8.1% in 2024. Meanwhile, total car sales are on track to grow 2% this year.
“Despite the record third-quarter performance, the sharp decline in the fourth quarter led to an overall year-over-year decline for electric vehicles,” Stephanie Valdez Streety, director of industry insights at Cox, said on a conference call Wednesday. “The year was characterized by extreme volatility caused by changes in policy.”
It’s not a huge drop. And maybe it’s not as dark as some headlines think. But it’s a remarkable shift, especially when you consider the trajectory of electric vehicle sales over the past few years. Electric vehicle sales have soared this decade, pushing them from a very niche technology to something approaching the mainstream.
The Tesla Model 3 and Model Y drove electric vehicle sales in late 2010 and early 2020.
In 2020, about a quarter of a million new electric vehicles hit the road in the United States. With the advent of more electric options and increased awareness, sales have skyrocketed. They jumped about 90% to 488,000 in 2021, largely due to the Tesla Model 3 and Model Y. Sales grew another 65% in 2022, to 810,000 units. Sales exceeded the million mark in 2023 for the first time. Last year, even as the electric vehicle industry faced speed bumps, full-year sales increased more than 7%.
Even before President Donald Trump and a Republican Party hostile to anything climate-related took office, Cracks were forming in the electric vehicle market. Factors such as higher purchase prices and concerns about vehicle charging infrastructure have slowed sales growth and blindsided an industry that has invested hundreds of billions of dollars to catch up with Tesla.
But the political shock eventually pushed growth into negative territory. At the end of 2024, Cox expects electric vehicle sales to reach about 1.6 million units the following year. They failed to achieve this.
Besides ending tax incentives for electric vehicles years before their scheduled expiration date, the federal government decided this year Average corporate fuel economy rulesgot rid (many say illegally) of state-level regulations that forced car companies to increase sales of zero-emission cars over time. Rapid tariffs that have cost automakers billions haven’t helped them plan for the future either.
“Manufacturers had set strict timelines around Biden-era regulations. When those policies changed, it created uncertainty,” Valdez-Streetti said in an email.
With all the pro-EV carrots and sticks eliminated, automakers are starting to cancel models that never seem to go away. the Acura ZX, Nissan Ariya and Polestar 2 have all been discontinued in recent months.
Acura canceled its ZDX electric crossover this fall after just one year in production.
Photo by: Acura
This week, in a decision that shook the automotive world and highlighted the difficult environment, Ford killed the F-150 Lightning. The electric version of one of America’s most popular trucks was supposed to get the country hooked on electric vehicles. Canceling it now is a sure sign that America’s electric vehicle market has entered a new era — one in which automakers need to temper their expectations and take a closer look at what exactly they’re bringing to the market.
Expect disruption for the foreseeable future as automakers adjust their strategies and react to the new normal. Cox expects EV sales in 2026 to be roughly flat again: 1.3 million units and about 8.5% market share.
But automakers are not giving up on electric vehicles entirely. Analysts still expect battery-powered cars to replace gas-burning cars in the long term as technology improves and their cost decreases.
“The policy changes have created a reset moment, but the transition is continuing — just on a different timeline than expected,” Valdez Streete told InsideEVs.
Contact the author: Tim.Levin@InsideEVs.com
