One Year After Federal Incentives Ended, The US EV Market Shows Signs Of Recovery

A year after federal EV tax credits ended in the United States, the electric vehicle market has experienced a significant shift, marked by initial sales drops followed by gradual recovery. Industry data and executive commentary provide insight into how manufacturers and consumers are adapting.

Market Resilience and Sales Trends

Following the expiration of the $7,500 federal incentive, US EV sales experienced notable volatility. According to JD Power data cited in industry reports:

• Retail EV market share dropped sharply from over 14% in September 2025 to 5% by November 2025.
• Sales began a gradual rebound, climbing back to over 8% by May and registering at 7.9% in September.
• Days-to-sell metrics improved on dealer lots, dropping from 115.6 days in March to 89.4 days in September, suggesting a closer balance between supply and demand.

Varying Performance Among Automakers

The recovery has not been uniform across all brands. Cox Automotive estimates indicate that:

• Tesla and Rivian have largely driven recent volume, with overall US EV sales growing 6.1% between the second and third quarters to approximately 262,000 units.
• Excluding Tesla, the broader market growth figures look notably different, as legacy automakers have canceled or delayed several electric models amid looser regulations.
• EV-only manufacturers maintained their focus on electric propulsion, while traditional automakers adjusted their product lineups.

Growth in the Used EV Market

While the new car market navigates policy shifts, the secondhand EV sector has demonstrated strong demand:

• Cox Automotive reported over 47,000 used electric vehicle sales in a recent monthly period, marking a 21% year-over-year increase.
• Used EVs sold in an average of 41 days according to Cars.com data, outpacing internal-combustion models.
• Increased availability of longer-range models and leased vehicles entering the secondary market have supported buyer interest.

Industry Outlook

Automotive executives and market analysts remain cautiously optimistic about long-term adoption, citing global trends, manufacturing efficiencies, and expanding charging infrastructure—which recently surpassed 80,000 DC fast charging ports in the US. While traditional manufacturers continue balancing hybrid and electric strategies, industry observers note that long-term scale and infrastructure improvements will continue shaping the transition.