The US electric vehicle market in 2025 showed a 0.4% drop in registrations for the first time since 2016. This is due to the cancellation of federal tax incentives, which cooled consumer interest.
The US electric vehicle market, by the end of 2025, entered negative territory for the first time since 2016, showing a 0.4% drop in registrations. Analysts attribute this dynamic primarily to the expiration of federal tax incentives, which led to a cooling of consumer interest after rapid growth in previous years. This is reported by Autoblog, writes UNN.
Details
According to an S&P Global Mobility report, 1.3 million electric vehicles were registered in 2025, accounting for 7.8% of total sales. This contrasts sharply with 2021 figures, when the market grew by a record 88%. S&P's lead automotive analyst, Stephanie Brinley, notes that the market can only stabilize with an expanded model range and infrastructure development.
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The market should begin to stabilize this year as more EVs become available and infrastructure continues to grow. There is opportunity for growth, though it is far from certain that a rebound will begin this year.
– Brinley noted.
Impact of subsidy cancellation on consumer behavior
The drop in demand is directly related to the lack of financial support from the state, which previously significantly reduced the cost of purchase for the end consumer.
Experts emphasize that many buyers rushed to purchase cars before the benefits were canceled, which created an effect of "premature demand" and led to a subsequent decline. Although the electric car market has grown almost eightfold in the last five years, the current situation demonstrates a difficult transition from early adopters of the technology to the mass consumer.
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