End of US tax credit drives record EV sales

According to figures from Kelley Blue Book, EV sales rose by 40.7 per cent compared to Q2 and by 29.6 per cent year-on-year. The record quarter exceeded the previous peak from Q4 2024 by almost 20 per cent. In Q3, electric cars accounted for 10.5 per cent of total car sales in the US – another all-time high.

However, these new records may have limited significance, as they mainly stem from a one-off effect: the end of the US federal EV tax credit at the end of September 2025. The incentive, scrapped under Republican leadership, caused many buyers to buy before the cut-off date to still benefit from up to $7,500. Although several manufacturers and states extended support schemes in various forms, a sales decline in the fourth quarter seems inevitable.

Cox Automotive, the company behind Kelley Blue Book, noted that not all manufacturers benefited equally from the EV sales boom. Among the winners were General Motors and Volkswagen, both of which more than doubled their EV sales compared to Q3 2024. Tesla also saw an eight per cent year-on-year increase – marking its first quarterly growth in the US this year. Hyundai, Porsche, and Volvo also recorded significant gains.

“Clearly, the urgency of an incentive-ending deadline got people and dealers moving,” said Cox Automotive.

Toyota and Nissan see EV sales drop

On the flip side, there were clear losers. The Japanese carmakers Toyota and Nissan, both of which had recently scaled back their US EV plans due to expiring incentives and uncertain market outlook, sold fewer electric cars in the United States between July and September 2025 than in Q3 2024. Toyota’s EV sales dropped by 26.6 per cent, while Nissan recorded a massive 60.9 per cent decline. BMW also saw a 16.4 per cent decrease in its US EV sales, while Mercedes-Benz posted only a small three per cent increase.

Overall, Cox Automotive concluded that building and selling EVs in the US will now become more challenging.

“The training wheels are coming off,” said Stephanie Valdez Streaty, Cox Automotive’s Director of Industry Insights. “The federal tax credit was a key catalyst for EV adoption, and its expiration marks a pivotal moment. This shift will test whether the electric vehicle market is mature enough to thrive on its own fundamentals or still needs support to expand further.”

Cox Automotive also highlighted Tesla’s situation. While it is positive that Tesla managed to grow again in the US market during Q3 – and even achieved a global delivery record – weak first-half sales have left the company trailing overall in 2025. According to Kelley Blue Book estimates, Tesla’s share of total EV sales dropped from 49 to 41 per cent between Q3 2024 and Q3 2025.

“Recently announced price cuts may help Mr. Musk’s company maintain volume,” Cox analysts said. “But the challenges are only getting tougher for Tesla, which essentially has a two-vehicle lineup supported by three niche vehicles.”

The US market saw sales of over 90 different EV models in Q3, but only nine achieved more than 10,000 deliveries. “The Tesla Model Y and Model 3 continue to stand out, with sales of 114,000+ and 53,000+, respectively, in Q3,” the report stated. The two volume models remain strong performers in the US, even ahead of the launch of new ‘standard’ variants. However, Tesla’s success depends heavily on their continued performance.

In third place behind the Model Y and Model 3 was the new Chevy Equinox, with nearly 25,000 units sold. Cox Automotive described the top three as “outliers”, as the vast majority of EV models in the US achieve fewer than 2,000 sales per month – or around 6,000 per quarter.

coxautoinc.com, coxautoinc.com (PDF)

This article was first published by Sebastian Schaal for electrive’s German edition.