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U.S. electric-vehicle sales dropped sharply after the $7,500 federal tax credit expired on Sept. 30, 2025, but later figures in the report show a gradual recovery. The rebound is uneven: Tesla and Rivian account for much of the new-EV momentum, while used EV sales have grown as more recent models enter the market.
U.S. electric-vehicle sales fell sharply after the $7,500 federal tax credit expired on Sept. 30, 2025, but have since shown a gradual, uneven recovery, according to data cited by InsideEVs. The rebound matters for automakers and buyers weighing whether demand can hold without the incentive: Tesla and Rivian account for much of the new-EV strength, while used EV sales have reached a record share of that market.
JD Power data cited in the report show battery-electric vehicles accounted for more than 14% of retail car sales in September 2025, as buyers moved purchases forward before the credit expired. The share fell to 7.1% in October and 5% in November, its lowest level since 2022, before rising above 6% in December and above 8% in May. JD Power’s figure for September in the later period covered by the report was 7.9%, illustrating that the market had not returned to the pre-expiration surge.
The overall recovery has not been shared equally among manufacturers. Cox Automotive estimated that U.S. EV sales rose 6.1% from the second to the third quarter, reaching about 262,000 vehicles, the highest quarterly level since the credit ended. The firm estimated that sales would have edged down without Tesla. Tesla’s year-over-year sales still fell 19.7% in the third quarter, but Cox said the broader market contracted by close to 40%; the company’s market share rose above 50%. Tesla does not separately report its regional sales, so those figures are estimates.
The report also points to a stronger secondhand market. Cox Automotive said Americans bought more than 47,000 used EVs in the latest month cited, up 21% year over year and giving EVs their largest-ever share of used-car sales. More recent, longer-range models are becoming available as vehicles leased in earlier years reach the secondhand market. The source does not provide a specific national sales total for the new-EV market across the full year after the credit ended.
A Recovery Uneven Across EV Buyers
The figures suggest the end of the tax credit did not erase demand for electric cars, but it changed the conditions under which automakers must compete. Buyers no longer receive that federal purchase incentive, and companies have responded in different ways: some legacy manufacturers have delayed or canceled planned EVs, while Tesla and Rivian have helped support new-vehicle sales. That concentration means industry-wide growth can mask weakness among many individual brands.
For shoppers, the growing used market offers another route into electric ownership, with a wider selection of newer vehicles than the older, lower-range models that once dominated the secondhand supply. But sales growth alone does not establish how affordable EVs are for households, whether demand will continue, or how quickly automakers will restore products they have pulled back. The distinction matters to manufacturers planning investments and to consumers comparing new and used vehicles without the expired credit.
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How Sales Shifted After September
The federal $7,500 EV tax credit expired on Sept. 30, 2025, amid other policy changes affecting the auto industry, according to the InsideEVs report. The approach of the deadline brought forward purchases: the electric share of retail sales rose above 14% that September, then dropped steeply over the next two months. The report characterizes the subsequent rebound as gradual rather than a return to the unusually strong buying period before the deadline.
Market conditions also differ by manufacturer and vehicle type. The report says legacy automakers have canceled or delayed roughly two dozen electric models since the policy shift, including the Ford F-150 Lightning, Volkswagen ID.4 and Honda Prologue. Those decisions can limit the models available to buyers, though manufacturers also face commercial decisions about where they expect to make money. Toyota is described as an exception among legacy companies, with EV sales growing as it introduced new models.
““All of a sudden, you either add the incentive, or you lose sales, or you do something in between.””
— José Muñoz, Hyundai chief executive
Demand Beyond the Rebound
The figures show a recovery in selected periods, not a clear long-term trend. The report does not establish whether EV sales will keep rising, how much of the increase reflects new demand rather than purchases shifted between months, or how sales would have developed if the credit had remained in place. The timing of the report’s figures also varies: retail-sales shares, quarterly estimates and used-car totals describe different periods and should not be treated as directly comparable.
Several explanations remain suggestive rather than proven. Muñoz said Hyundai dealers asked for more Ioniq 5s after the war in Iran pushed up gasoline prices, but the report does not quantify how much fuel costs affected sales. It also cites dealer-lot data as a sign that supply and demand may be moving closer to balance, not proof that the market has reached equilibrium. Cox’s Tesla figures are estimates, and the source does not give a complete account of the latest used-EV sales month.
Signals to Watch in Sales Data
The next useful test will be whether new-EV sales continue to hold up across multiple quarters, rather than rising in a single period or relying heavily on a few manufacturers. Future data from JD Power and Cox Automotive can show whether EVs maintain or increase their share of retail purchases and whether the market’s performance broadens beyond Tesla and Rivian. Dealer inventory and days-to-sell figures will also help show whether the balance between available vehicles and buyers continues to improve.
Used-EV sales are another key measure to follow as more leased vehicles enter the market. The report does not identify a future release date or forecast a specific sales level. For now, the confirmed picture is a sharp post-credit decline followed by a partial rebound, alongside stronger used-car activity; whether that pattern becomes sustained growth remains open.
Key Questions
When did the federal EV tax credit end?
The $7,500 federal EV tax credit cited in the report expired on Sept. 30, 2025.
Did EV sales recover after the credit ended?
They recovered in some measures, but not evenly. JD Power data cited in the report show the electric share of retail sales rising above 8% in May after falling to 5% in November. Those figures do not establish a sustained recovery across all automakers.
Which companies account for much of the new-EV rebound?
The report says Tesla and Rivian have contributed much of the rebound. Cox Automotive estimated that the market would have shrunk slightly from the second to the third quarter without Tesla.
What is happening in the used-EV market?
Cox Automotive reported more than 47,000 used EVs sold in the latest month cited, a 21% year-over-year increase. The report links the growing supply partly to newer, longer-range leased vehicles entering the secondhand market.
Has the EV market returned to its pre-expiration level?
The report does not show a full return to the brief September 2025 surge, when EVs exceeded 14% of retail sales. A later September figure was 7.9%, and the source describes the recovery as gradual.
Source: insideevs.com
