The U.S. electric vehicle market has reached an inflection point. After years of steady but uneven growth, sales surged to record levels in 2025, with Tesla and General Motors leading the charge. Yet the expiration of federal incentives in September is raising new concerns that America’s EV boom may lose momentum just as adoption begins to scale. The question now is whether consumer demand can remain resilient without government support, particularly as the U.S. continues to lag behind China and Europe in mass EV adoption.

Record Sales Driven by Incentives and Competition

New data from Motor Intelligence reveals that U.S. sales of all-electric vehicles, excluding hybrids, surpassed 1 million units through the first nine months of the year. The third quarter alone saw more than 438,000 EVs sold, representing 10.5% of total auto sales — a sharp rise from 7.6% in the first quarter. For the full year, EV sales are projected to reach 1.3 million units, solidifying the segment’s growing share of the U.S. automotive market.

Tesla retained its leadership position with an estimated 43.1% market share through September, though that marked a decline from 49% last year as rivals expanded their offerings. GM, leveraging the industry’s broadest EV lineup, grew its share to 13.8% from 8.7% at the start of 2025, surpassing Hyundai-Kia’s 8.6% share. Ford, Volkswagen, Honda, and BMW rounded out the top players, with smaller startups such as Rivian and Lucid still struggling to break into mass adoption.

The Policy Shift and Its Impact on Demand

The sales surge was amplified by consumer urgency to secure up to $7,500 in federal tax credits before they expired in September under the Trump administration’s “One Big Beautiful Bill Act.” Analysts and executives warn that the removal of these incentives could trigger a boom-and-bust cycle in the market.

Ford CEO Jim Farley recently cautioned that EV market share, which reached 10% to 12% in September, could fall back to around 5% as incentives vanish. The risk is particularly acute given that EVs remain more expensive than their internal combustion counterparts, even with declining battery costs. If affordability falters, momentum could stall despite growing consumer awareness and wider model availability.

Global Context and Competitive Pressure

While U.S. sales are reaching milestones, the country still lags global peers. According to the International Energy Agency, China sold 6.4 million all-electric vehicles last year, while Europe reached 2.2 million units. This divergence highlights the role of supportive policy frameworks abroad, where subsidies and charging infrastructure investment continue to accelerate adoption.

Automakers in the U.S. now face a dual challenge: sustaining demand without subsidies while scaling production to compete globally. GM has emphasized its ability to balance internal combustion and electric offerings, while Tesla remains focused on maintaining its lead despite shrinking market share. For newer entrants such as Rivian and Lucid, the end of incentives makes the road to profitability even steeper.

Outlook: Testing the Market’s True Strength

The end of federal subsidies will serve as a critical test of U.S. consumer appetite for EVs. Automakers that can balance affordability, product variety, and infrastructure support are likely to consolidate market share, while weaker players may be pushed to the margins. Investors and policymakers alike will be watching how sales trends evolve into 2026, as the industry seeks to prove that EV adoption can stand on its own — without the crutch of government incentives.