At this time last year, electric vehicle buyers in the United States were rushing to take advantage of the final weeks of the federal government's popular $7,500 tax credit for plug-in models that was set to expire at the end of September 2025.
That tax credit, which was first adopted during former President George W. Bush's administration in 2008 to help spur EV adoption, was eliminated on Sept. 30, 2025, by a law that was passed by Republicans in Congress and signed by President Donald Trump.
EV sales have been closely watched since then, as both supporters and detractors sought to understand how much demand for plug-in cars there would be without any government support. In recent months, in a bid to replace some of the lost federal support,
state leaders in California stepped in to offer $3,750 in instant EV rebates to first time buyers in their state, which accounts for about a quarter of the nation's EV market.
According to Cox Automotive, U.S. EV sales were down nearly 24% in the first half of 2026, which is the most recent data available, compared to the first half of 2025, when the $7,500 federal tax credit was still available. But the group said EV sales in the second quarter of 2026 were up more than 14% over the first quarter of the year as rising gas prices pushed shoppers toward more fuel-efficient models.
With that in mind, the USA TODAY Cars Team took a look at where the U.S. EV market stands one year after Trump killed the federal tax credits and what shoppers can expect moving forward.
What happened after the federal EV tax credit went away?
Several of the most popular electric car models experienced steep sales drops in the fourth quarter of 2025, after setting records in the third quarter as car buyers rushed to take advantage of the $7,500 federal tax credit before it expired at the end of September 2025.
Here's how some of the top selling U.S. EVs fared in the third quarter of 2025 compared to the fourth quarter of that year, which was the first since Trump pulled the plug on the federal tax credit:
- Tesla Model 3 and Model Y | Q3 2025: 481,166 | Q4 2025: 406,585
- Ford Mustang Mach-E | Q3 2025: 20,177 | Q4 2025: 9,658
- Hyundai Ioniq 5 | Q3 2025: 8,408 | Q4 2025: 2,279
- Honda Prologue | Q3 2025: 20,236 | Q4 2025: 2,641
- Volkwagen ID.4 | Q3 2025: 4,518 | Q4 2025: 248
As the auto industry moved forward into 2026, several automakers responded to Trump's decision to eliminate the U.S. EV tax credit by announcing plans to pull the plug on low-selling electric models.
Ford announced plans to transition its F-150 Lightning pickup from a fully electric vehicle to a hybrid car type known as an Extended Range Electric Vehicle, or EREV.
Meanwhile, Honda axed three of the three electric models that it planned to build and sell in the United States. The Japanese automaker announced in a March 12 statement that it ended its plans to produce the electric Honda 0 SUV, Honda 0 Saloon and Acura RS.
Lamborghini also abandoned plans to develop fully electric cars by the end of the decade in favor of building more hybrids. The Italian automaker, a subsidiary of Volkswagen, confirmed to USA TODAY that they are not following the plan to build battery electric cars by 2030 because of weakening demand in the United States.
Also, Tesla is planning to end production of its Model S luxury electric sedan and Model X luxury electric SUV in the spring in favor of building robots, company CEO Elon Musk told investors on Tesla's January earnings call.
Where does the US EV industry stand now?
Early signs pointed to continued increases in EV interest as summer turns the fall. Cox said carmakers sold an estimated 78,895 electric cars in August, which the group said was up 2.5% from July but, as expected, was down 46.9% from August 2025. By contrast, hybrid sales were forecasted to increase by approximately 9% in the first half of 2026.
"August brought further evidence of a steadily maturing electric vehicle (EV) market," Stephanie Valdez Streaty, Cox Automotive’s director of Industry Insights, said.
"New and used EV sales increased from July, inventory levels moved closer to ICE+ vehicles and growing off-lease returns continued to expand used EV availability," she continued. "At the same time, lower-priced models gained share in the new market, helping narrow the price gap between EVs and ICE+ vehicles."
California started its "MyFirstEV" rebate program in August, and 13 major automakers confirmed plans to participate in California's new $3,500 instant rebate program for new EV buyers in the state. California accounted for nearly 20% of all U.S. EV sales in the first half of 2026, according to the Alliance for Automotive Innovation, which lobbies in Washington for most major carmakers.
New polling from the Zero Emission Transportation Association, which lobbies for EV-friendly policies in Washington, shows willingness to consider EVs may be more closely tied to age than partisan affiliation, which was the assumption in the early days of the second Trump administration.
ZETA's poll showed 75% of Americans under 35 say they are likely to purchase or lease an EV within five years, compared to just 23% of adults over 65 who said they would consider buying a plug-in model soon. By comparison, ZETA said 57% of Democrats and 45% of Republicans. The group said the 52% spread on the age comparison dwarfs the 12% spread on the partisanship question, showing age is a better predictor of openness to EV adoption now than politics.
"What this data shows us is that EVs are the cars of today and of the future," Corey Cantor, Research Director at ZETA said in a statement. "Even if they don’t own one now, many people see themselves driving EVs within the next five years. Consumers want industry and policy choices that will make that ownership easier to attain, not harder."
Keith Laing is an automotive reporter on the National Trending Desk at USA TODAY. Contact Keith at klaing@usatodayco.com.
This article originally appeared on USA TODAY: Where the US EV market stands a year after Trump ended tax credits
