Here’s why a dozen electric vehicles defied the fourth-quarter sales collapse and continued to grow

• Electric vehicle sales in the United States fell by 36% year over year in the fourth quarter of last year.
• Many Q4 purchases occurred in Q3 due to the expiration of tax credits.
• But electric cars like the Tesla Model Y, Porsche Taycan, and Cadillac Escalade IQ have continued to grow regardless.

The electric vehicle market continues to improve every year. More options, a steadily expanding charging network, and real improvements in the underlying technology helped make last year the second-best year on record for U.S. electric vehicle sales, the bane of detractors.

Americans bought 1.27 million battery-powered cars in 2025, just 2% less than 2024’s record high of 1.3 million, according to Cox Automotive Estimates. But this number hides a sharp shift that occurred late last year.

After the $7,500 federal tax credit expired at the end of the third quarter, sales declined in the fourth quarter, falling to just 234,000 units. This represents a 46% decline from Q3 and a 36% decline year over year. Most EVs recorded negative growth in that period. However, a small but expressive group of about a dozen vehicles bucked the trend.

Photography: Kevin Williams/InsideEVs

Several models from General Motors, Porsche, Tesla, Lucid and Mercedes were able to grow last quarter without the help of the $7,500 federal tax credit. They also did it in the middle Relaxing average fuel economy (CAFE) rules for businesseswhich no longer penalizes automakers for not meeting efficiency targets.

To put a bunch of examples on the table (full list below), sales Porsche Taycan It grew 23.6% year over year to 1,672 units in the fourth quarter. Tesla sold 92,460 units of its popular cars Model Y intersection during the same period, representing a growth of 8.1%. And sales Cadillac Escalade iQ It grew by 211.2% to 2,085 units.

“The common thread among Q4 growers is that premium buyers were less reliant on the $7,500 federal tax credit,” Stephanie Valdez-Streti, director of industry insights at Cox Automotive, told me in an email. “While most electric vehicles saw a significant decline in sales, some new or recently refreshed high-end models held steady, suggesting that shoppers in the premium segment were not looking for incentives,” she added.

In some cases, it’s easy to see why this happens. Escalade IQ production was still ramping up at the end of 2024, so volumes were expected to increase at the end of 2025.

But other models had significant growth on merit, improved thanks to some end-of-year holiday deals. Porsche gave the Taycan a Huge upgradeadding faster charging speeds and a more power-dense battery that greatly improves its range, things that will likely make the car more compelling to buyers on the fence.

The Model Y tells a similar story. Tesla rolled out a mid-cycle refresh with updated styling, improved suspension, and better overall engineering. This kept the Model Y the undisputed king of electric cars in America last year. The company also continued to offer 0% financing through the end of the year, and continues to do so on new standard models.

With the exception of Tesla, most of the electric vehicles that grew in the fourth quarter are firmly in the luxury segment, where buyers are less reliant on incentives and more attracted to the vehicles themselves. These shoppers continued to sign papers even as the support disappeared. This shouldn’t be too surprising, as if you bought an electric car with a sticker price of over $80,000, you won’t get the credit anyway.

2026 GMC Sierra EV AT4 Maximum Range

Photography: Patrick George

There seems to be a broader lesson here that doesn’t just apply to luxury EVs. If EVs can reach price parity with gas cars and offer compelling technology and real choice, buyers may not need incentives.

That’s why the next wave of electric vehicle launches is so important. More than 30 new or updated electric vehicles are scheduled to launch in the United States in 2026. Many of them are aimed directly at the lower end of the market, like the Nissan Leaf and Chevy Bolt, or at the heart of the market, around $50,000, with the Rivian R2, which will directly challenge the Model Y.

“Overall, the data suggests that strong, new products from strong brands can still grow through policy headwinds, but mostly at the premium end of the market,” Valdez-Streti said. “This has been a long-standing reality in the auto industry, where new product grows, old product slows down,” she added.

Contact the author: suvrat.kothari@insideevs.com