A whiplash year for electric vehicles
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What significant changes occurred for electric vehicle sales in 2025?
It's been a whiplash year for the electric vehicle market in the U.S. From American Public Media, this is Marketplace Tech. I'm Megan McCarty Carino.
2025 brought some new speed bumps for electric vehicle sales, namely the Republicans' One Big Beautiful Bill Act. It cut federal EV tax credits up to $7,500 for new cars and $4,000 for used ones. Those incentives had been on the books in some form since 2008 and were expanded during the Biden administration.
How did the expiration of federal EV tax credits affect consumer behavior?
They expired at the end of September. Consumers rushed to take advantage before they disappeared, leading to record high sales earlier this year. But now the market faces an uncertain road ahead. Marketplace's Henry Epp has been reporting on this all year. We asked him about the outlook for EV sales now that federal tax credits are gone.
So sales maybe unsurprisingly really fell off once there was no longer this incentive for consumers. Monthly EV sales fell by nearly 50% in October from September, and they've sort of stayed at that level in November. This is according to Cox Automotive. One reason for this, you know, is the end of those incentives created sort of a classic pull-forward situation. So, you know, people who might have bought an EV, say, around now, around the holidays or in early 2026, they did that instead in July or August when this tax credit was still on the books.
I'm curious, how do car prices compare? EVs for a long time were much, much more expensive than gas cars. Without the tax credit, what is the price difference?
Yeah, so again, this is data from Cox Automotive, but the difference for new cars is over $9,000. It'll run you well over $9,000 more than a combustion engine car to buy a new EV. On the used side, it's a little bit closer. It's more in the $2,700 range, still cheaper. EVs are a little bit more expensive. But the used part of the market is getting a lot more affordable for EVs. There are a lot more EVs, you know, that were built, say, three, five years ago coming onto that market. You can actually get, I was looking around, you can get a Tesla for like $21,000, $23,000 in a lot of places, which is a pretty big difference.
Even before the end of the tax credit, it seems like a lot of automakers had been sort of softening on their most aggressive targets for, you know, how many EVs they wanted to sell. How have car companies been strategizing since the end of tax credits?
Yeah, I mean, we've seen them really pull back. Companies like Ford and GM have both taken billions of dollars in charges on their EV operations, you know, essentially saying we're giving up a lot of what we had been working on. They have scaled back some of their offerings. particularly for larger EVs, some sort of electric trucks and that kind of thing. What I think is kind of interesting is a lot of companies still think that this is the future, that eventually more cars will be electric. So they're not giving it up entirely. Ford, for example, has this operation that it's calling a skunkworks, this thing that it has within the company to develop a whole new EV platform that it'll build later.
It says, you know, eventually a bunch of different electric vehicles on, you know, GM's CEO has said EVs are still the future, even as at least in the short term, they really pivot towards more combustion engines.
And what does the picture look like for global EV sales?
It looks pretty different in other parts of the world. They're also exporting their EVs to other parts of the globe. In Europe as well, EV sales have grown quite a bit, but policymakers there are also planning to ease their ban on combustion engine vehicles, which was supposed to take effect in 2035. So now there's less of a requirement for automakers to build only EVs in Europe as well. So overall, I mean, the rest of the world is adopting these a little bit faster, but the picture is changing pretty quickly.
We'll be right back. You're listening to Marketplace Tech. I'm Megan McCarty Carino. We're back with Marketplace's Henry Epp on the new reality for EV sales.
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