After the September gold rush, US electric car sales face a chilly new reality

The US EV sales party, fueled by steep government incentives, appears to be over. October sales numbers reveal a new reality and confirm many predictions that the market would hit a wall once the federal tax credit vanished. Industry analysts at both J.D. Power and S&P Global Mobility confirmed that the EV market share, which soared to a record high of over 12% in September, fell off a cliff in October, crashing to around 5%.

The 5% market share seen in October is not just a fraction of September's peak; it is a huge step backward with numbers not seen since early 2022. The total number of new EVs sold tells the story clearly: after Americans bought nearly 150,000 electric vehicles in September, that number collapsed to just 64,000 in October. Plug-in hybrids, which also benefited from credits, saw their sales share slashed in half, falling from 2.2% to just 1% of the market.

This sales collapse has two primary causes. First, the market is suffering from what S&P Global Mobility aptly calls an EV volume "hangover." Consumers, aware that the $7,500 tax credit would end on September 30, rushed to dealerships in July, August, and September. This scramble to lock in the discount "stole" sales from the following months. It was only natural that October would see a big slowdown after such a frantic, incentive-driven buying spree.

Apart from the sales hangover, the market is now settling into a new, more difficult environment. Without the subsidy, electric cars are suddenly much more expensive. The sticker price now reflects the true cost, and manufacturers are scrambling to adjust. According to J.D. Power, car companies are already cutting prices and offering big discounts to offset the lost credit and prevent an even larger sales decline. Just after the credit expired, Hyundai, for example, slashed the price of its 2026 Ioniq 5 by as much as $9,800. BMW followed suit, offering a $7,500 discount on leased EVs through the end of October.

A second, even more powerful, challenge is brewing in Washington. The federal tax credit is not the only policy propping up EVs that has been removed. The Trump administration and the Republican-controlled Congress also dismantled strict fuel economy regulations and California's EV mandate. These rules previously penalized car companies for electrifying their lineups too slowly. With those penalties gone, automakers have very little incentive to push for rapid growth in their EV plans. Many can now, and likely will, choose to focus on their highly profitable gas-burning trucks and SUVs for as long as possible.

This policy shift is already triggering pullbacks from major auto brands. We are seeing a rapid-fire series of announcements that would have been unthinkable a year ago. Acura killed its ZDX electric SUV after just one model year. Ford is idling production of its F-150 Lightning pickup truck through the end of the year. General Motors announced it will build the 2027 Chevrolet Bolt on only one shift instead of two and laid off 1,750 workers from its EV division. Kia also postponed its upcoming EV4 sedan "until further notice."

But October seems to be just the beginning of an even tougher market ahead. S&P Global Mobility expects "continued month-to-month volatility" and "a significant drop in adoption" for battery-electric vehicles through the end of 2025. Most industry experts still believe that Americans will buy more electric cars over the long term, but the growth now looks to be much slower and more painful than previously hoped.

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