EV Sales Plummet as Federal EV Tax Credit Ends

Electric vehicle sales in the United States have experienced a significant decline following the discontinuation of federal subsidies under President Trump’s administration. The removal of a $7,500 tax credit has contributed to a sharp drop in consumer demand for these vehicles.

According to recent data from Cox Automotive, dealers reported selling 74,835 electric vehicles in October, marking a 30.3% decrease compared to the previous month and an overall decline since September when consumers were incentivized by available tax credits. J.D. Power’s analysis revealed even steeper numbers, with EV sales falling by more than 53%. The share of EVs among total monthly car sales has shrunk from 12.9% in September to just 6.0%, indicating a clear reversal in the market trend.

Automakers are now adjusting their production plans accordingly. Ford, which invested heavily on its electric lineup including the F-150 Lightning model, may scale back operations due to weak sales momentum without financial incentives driving purchases. Other manufacturers such as Nissan, Kia, Acura, Mercedes-Benz, Stellantis and Porsche have already announced production cuts, primarily because consumer interest remains low even after tax breaks were removed.

The broader market impact is evident in pricing dynamics too. Cox Automotive data shows that while electric vehicles saw average prices rise by 1.6% since the credit ended, conventional gasoline-powered cars remained consistently cheaper at roughly $49,084 compared to nearly $59,125 for EVs. This price gap highlights how government policies can significantly influence market behavior.

Industry observers concur that this policy shift has returned markets closer to their natural equilibrium without artificial intervention. Experts suggest manufacturers are likely shifting focus towards hybrid vehicles as the subsidies fade away, which analysts argue presents a more sustainable approach given current consumer preferences and technological realities.

Michael Shannon observes that electric vehicle demand appears poised to stabilize or even grow modestly once market dynamics return to normal after the government stepped back from artificially inflating EV popularity through financial incentives.