US EV Sales Plummet 41% After Tax Credits Expire

When the federal EV tax credit expired on September 30, 2025, it didn’t take long for the impact to show up in sales numbers. January 2026 EV registrations fell 41% year-over-year to an estimated 60,000 units. That marked four straight months of declining sales since the credit ended.

The federal EV tax credit expired September 30, 2025 — and four months later, sales had already fallen 41%.

The numbers told a stark story. EV market share dropped to roughly 6% in January 2026, down from 8.3% the year before. Meanwhile, gasoline vehicles reportedly gained share as EV registrations fell. Hybrid vehicles also grew, reaching 14.7% of the market.

The final quarter of 2025 was especially rough. Reports indicate Q4 2025 EV sales fell sharply — down an estimated 46% from Q3 and roughly 36% lower than Q4 2024. That reportedly made it the weakest quarter for EV sales since Q4 2022. Market share fell hard too, dropping from a Q3 peak of 10.5% to reportedly just 5.8% in Q4.

Tesla held up better than most, but it still felt the pressure. The company registered 32,123 units in January 2026, down 26% year-over-year. Even so, Tesla kept a commanding share of over 60% of the US EV market. For all of 2025, Tesla sold an estimated 589,000 units, down slightly from 2024. Tesla’s US EV market share had already been declining through 2025, hitting a new low of 40.8% in Q3 before the tax credit expiration reshaped the market.

Other brands didn’t fare as well. Ford’s EV registrations dropped 67% to just 2,772 units in January. Chevrolet reportedly fell around 55% to roughly 2,658 units. Hyundai was down 23% to 327 units. Cadillac was a rare bright spot, coming in second place with 3,189 units, up 8.1%. Toyota also gained, rising 25% to 2,529 units, though it still trailed Cadillac. GM stood out as a bright performer for the full year, selling over 150,000 EVs in 2025, a significant increase compared to 2024.

Industry analysts had widely predicted a sharp drop after the tax credit ended. They expect the market to go through a prolonged readjustment as it finds its natural demand levels. Without government incentives or penalties pushing buyers, the market’s now driven more by consumer choice. This shift mirrors the broader economic trade-off between initial costs and long-term viability that has defined the transition away from conventional gasoline vehicles. Analysts do see a path forward through better models, improved charging networks, and stronger batteries, but they say 2026 will still be a challenging year for the EV industry.

✅ Claims in this article were verified using AI-assisted fact-checking.