Electric vehicle sales bounce back across America after tax credit drop

Electric vehicle sales in the U.S. are growing again after a slump caused by the cancellation of tax credits last year. Sales have gone up for the last three quarters in a row, according to a report from Cox Automotive.

Market Share

EVs captured 6.1 percent of the U.S. market in the best showing since the third quarter of 2025. Stephanie Valdez Streaty, who is the director of industry insights at Cox Automotive, stated that the market is finding its footing again. She added that EV prices are more competitive and high gas prices have sparked renewed interest from buyers.

Brand Performance

Toyota, Rivian, and Subaru led the pack. Sales of the Toyota bZ and Lexus RZ about doubled after a refresh hit dealerships late last year. These updated models got Tesla-style charging ports, larger batteries, more powerful motors, and faster charging times. Meanwhile, Tesla sales dropped by 20 percent compared to the same time last year. Even with this drop, Tesla still sells over half of all EVs during the third quarter and keeps its first-mover advantage.

Context

This U.S. recovery mirrors what happened in Germany when that government stopped purchase incentives in November 2023. German sales fell by more than half at first, but the market steadily recovered to reach its second highest on record by August.