Detroit – Tesla and General Motors are leading the U.S. automotive industry this year in record domestic sales of all-electric vehicles, as consumers hurried too buy EVs before up to $7,500 in federal incentives for each purchase ended in September.
New data provided to CNBC from Motor Intelligence shows U.S. sales of EVs, excluding hybrids, topped 1 million units through the first nine months of the year and set a new quarterly record of more than 438,000 units sold during the third quarter – achieving market share of 10.5% for the period.
That record market share is up from 7.4% during the second quarter and 7.6% during the first three months of the year, according to Motor Intelligence. Sales of all-electric models were estimated to be 1.3 million in 2024, with a roughly 8% market share.
U.S. EV industry leader Tesla, which does not report sales by region, is estimated to have retained its leadership position with a 43.1% market share through September,according to the data. That’s down from 49% to end last year, as competitors continue to release new EVs.
GM, which offers the most EV models
Potential EV Sales Cliff Looms as Federal Tax Credits Phase Out
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The expiration of federal tax credits for electric vehicles (EVs) in the U.S. is raising concerns among industry analysts and manufacturers, who predict a significant drop in sales and a potential boom-and-bust cycle. These incentives, part of the Inflation Reduction Act dubbed the “One Big beautiful Bill Act,” were designed to accelerate EV adoption, but their sunsetting could stall progress as the U.S. lags behind global leaders like china and Europe in the transition to zero-emission vehicles.
The End of the EV Tax Credit: what to Expect
For years, consumers purchasing new EVs have been eligible for a federal tax credit of up to $7,500, depending on vehicle eligibility and income requirements. This credit significantly lowered the upfront cost of EVs, making them more competitive with gasoline-powered cars. However, as of October 1, 2024, this incentive has ended, leaving many potential buyers facing higher prices.
Ford CEO Jim Farley anticipates a ample decline in EV sales following the incentive program’s conclusion. he stated he “wouldn’t be surprised” if the EV market share dropped from approximately 10-12% in September to around 5% afterward. https://www.cnbc.com/2025/09/30/ford-ceo-jim-farley-ev-incentives.html This projected fall highlights the significant impact of the tax credit on consumer demand.
U.S.EV Adoption Lags Behind Global Leaders
The timing of the credit’s expiration is especially concerning given the U.S.’s slower adoption rate of EVs compared to other major automotive markets. According to the International Energy Agency (IEA), China led global EV sales in 2023 with 6.4 million all-electric vehicles (excluding hybrids), followed by Europe with 2.2 million units. https://www.iea.org/reports/global-ev-outlook-2025/trends-in-electric-car-markets-2
This disparity underscores the need for continued policies to encourage EV adoption in the U.S., and the removal of a key incentive raises questions about the country’s commitment to achieving its climate goals.
What factors Drive EV Adoption?
Several factors influence the rate of EV adoption, including:
* Price: The upfront cost of EVs remains a significant barrier for many consumers.
* Charging Infrastructure: The availability of convenient and reliable charging stations is crucial.
* Range Anxiety: Concerns about the distance an EV can travel on a single charge.
* Government Incentives: Tax credits, rebates, and other financial incentives play a vital role in making EVs more affordable.
* Vehicle Availability: A wider variety of EV models across diffrent price points and vehicle types is needed to meet diverse consumer needs.
Looking Ahead: What’s Next for EVs in the U.S.?
While the end of the federal tax credit presents a challenge, the future of EVs in the U.S. isn’t necessarily bleak.Automakers are continuing to invest heavily in EV technology and production, and prices are expected to fall as battery technology improves and economies of scale are achieved.
Moreover, the Inflation Reduction Act includes provisions for domestic manufacturing of EV components, which could lead to lower costs and increased supply in the long term. However, sustained growth in the EV market will likely require a combination of continued innovation, infrastructure development, and possibly, the reinstatement or modification of consumer incentives.
CNBC’s Phil LeBeau contributed to this report.