America’s EV market is entering a new era
Image: Alamy
For years, the road to owning an electric vehicle in the US came with plenty of financial help.
The federal government offered thousands of dollars in tax credits, automakers rolled out hefty discounts, and some dealerships even offered EV leases for less than $100/month, giving some drivers a car payment that looked more like a phone bill.
But many of those perks have now disappeared, leaving the market in a much different place.
Here’s where things stand today
New EV sales and leases fell 20.5% year-over-year in Q2 following the expiration of the federal government's $7,500 EV tax credit last September, according to new data from Kelley Blue Book.
The loss of tax credits has also driven up leasing costs. Average EV lease payments rose from $538/month to $707/month over the year-long period ending June 2026, and are now ~$100 higher than the average non-EV lease payment.
Even before the credits expired, EV interest was already slipping. Sales fell 6.2% year-over-year in June 2025 as high prices, driving range, and charging infrastructure remained major concerns for potential buyers.
Ford, GM, and Stellantis have collectively written off $50+ billion from their EV investments, reflecting money poured into factories, technology, and other projects that are no longer expected to pay off as originally planned.
There are a few bright spots
Some buyers are finding a middle ground in hybrids, which accounted for 22.1% of new-car sales in California during the first half of 2026—vs. 15.9% for EVs. It marks the first time in four years that hybrids outsold EVs in America’s largest EV market.
- Things are also looking up when it comes to used EVs, which saw sales rise 20% year-over-year in June.
- That demand is also pushing up prices, a notable shift for vehicles known for steep depreciation.
Bottom line: The overall trend of EV adoption in America has slowed in recent months, as affordability increasingly becomes the biggest obstacle for prospective buyers following the expiration of federal tax credits.
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Sprinkles from the Left
- Some commentators argue that President Trump’s efforts to scale back support for electric vehicles is pushing American automakers away from a growing global market, weakening domestic investment and making it harder for companies like Ford and GM to compete with Chinese rivals.
- Others contend that recent proposed federal fees for EVs go beyond requiring drivers to pay their fair share for road maintenance, unfairly penalizing consumers and discouraging EV adoption while weakening US competitiveness in the growing market for cleaner vehicles.
- “$25 Billion. That’s What Trump Cost Detroit.” –Bill Saporito, NYT
- “Federal transportation bill should not punish EV drivers” –Seattle Times Editorial Board
- “Electric vehicles are simply better. Here’s the proof.” –Hebron Sher, The Hill
Sprinkles from the Right
- Some commentators argue that the Biden administration pushed electric vehicle adoption faster than consumer demand and charging infrastructure could support, leaving automakers on the hook for costly investments, and demonstrating the risks of using government policy to accelerate the transition beyond market demand.
- Others contend that the sharp decline in EV sales after federal tax credits expired shows that government subsidies had propped up demand beyond what consumers were willing to support, creating an artificial market that relied on taxpayer assistance to sustain sales.
- “The lesson of Biden’s failed electric-vehicle push” –WaPo Editorial Board
- “The October EV Sales Crash” –WSJ Editorial Board
- “Subsidies killed the EV industry” –Stephen Moore, Boston Herald
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