US EV Sales Plummet: The Aftermath of Expired Tax Credits

The landscape of the American electric vehicle (EV) market has dramatically shifted. Following the highly anticipated end of federal EV tax credits in late 2025, U.S. EV sales have experienced a significant downturn, confirming predictions from industry analysts. The consumer enthusiasm that fueled robust EV growth for much of 2025 appears to have evaporated almost overnight.

Post-Credit Plunge: A Predictable Market Correction

The elimination of federal subsidies had an immediate and profound impact. Shoppers, previously motivated by the financial incentive, accelerated their purchases in the months leading up to the credit’s expiry. This created a surge in demand, which has now been replaced by a noticeable lull. Even with some manufacturers stepping in to offer their own incentives, the market has not recovered, leading many automakers to reconsider their aggressive EV-only strategies and re-focus on internal combustion engine (ICE) models.

While a complete industry-wide picture will only emerge after Q4/full-year sales reports are released in January, preliminary monthly data offers a stark glimpse into the current state of affairs:

Brand-Specific Impacts: Early October Figures

• Hyundai: The popular Ioniq 5 saw sales nosedive by over 60% compared to the previous year’s October. Despite this steep monthly drop, year-to-date Ioniq 5 sales for 2025 still show a positive trajectory, up nearly 25%. In contrast, the Ioniq 6 sedan’s performance was more concerning, with October sales down 52% and year-to-date figures still lagging by 4%. Its already modest triple-digit monthly volumes underscore the challenge, with fewer than 10,000 units sold globally for the year.
• Kia: Like its sibling brand, Kia’s EV models felt the crunch. Sales of the EV6 plummeted by two-thirds compared to October of the prior year, a similar fate shared by the larger, three-row EV9. Overall, EV6 sales have declined by a third throughout 2025, contrasting with the Ioniq 5’s growth. While Kia does not differentiate Niro sales by powertrain, the smaller crossover surprisingly saw a 75% increase last month, despite an overall year-to-date deficit.
• Honda: The Honda Prologue, a newer entrant, took a significant hit, with sales down 80% to just over 800 units in October. Even more dramatically, its luxury counterpart, the Acura ZDX (now discontinued), recorded a mere 25 sales last month, a sharp decline from 1,200 units a year ago.
• Subaru: The Subaru Solterra, which was on track to match its 2024 total of over 10,000 units sold in 2025, experienced a near-total collapse in October, with only 13 units sold. This represents an abrupt halt to its prior sales pace.

Market Dynamics and Automaker Strategy Shift

In essence, the initial post-credit period has been challenging for EV sales. While a long-term recovery is anticipated, the immediate future appears uncertain. Much of the pent-up demand was satisfied during the period when EVs were effectively discounted by the tax credit. This meant that even if sticker prices haven’t drastically changed, automakers were shouldering a greater portion of the incentive costs, impacting their profit margins.

The disappearance of federal support has, for many manufacturers, led to an overnight evaporation of potential profits from EV sales. Consequently, a strategic pivot is underway, with automakers prioritizing the production and sale of models that offer healthier financial returns. This shift could see a renewed focus on more profitable ICE variants or hybrid options.

What’s Next for EV Buyers?

For consumers still in the market for an electric vehicle, this period of adjustment could present unique opportunities. With dealerships potentially holding leftover inventory, now might be an opportune moment to negotiate for a better deal as brands look to clear their lots. Keeping an eye on any further industry developments or new incentive programs will be crucial in the coming months as the market seeks a new equilibrium.