The Electric Car Dilemma: Is the US Losing Ground in the EV Market?

Sat Oct 11 2025 04:03:05 GMT+0300 (Eastern European Summer Time)

A look into the recent trends of electric car sales in the US and how they compare globally amidst policy changes and economic uncertainties.

Despite a surge in electric car sales in the US, factors such as the ending of government subsidies, higher prices compared to conventional vehicles, and trade tariffs suggest that the country may lag behind global competitors like China and the UK in the electric vehicle market. Analysts warn that without sustained support, the growth momentum may stall, leaving the US to grapple with significant challenges in the EV sector.

The Electric Car Dilemma: Is the US Losing Ground in the EV Market?

You could be forgiven for thinking that electric cars might finally be gaining momentum in the US.

Sales of battery cars topped 1.2 million last year, more than five times the number just four years earlier. Hybrid sales have also tripled, with battery-powered cars accounting for 10% of overall sales in August—a new high.

General Motors, Ford, Tesla, and other manufacturers have recorded electric sales in recent months, marking a bright spot in an industry grappling with high interest rates and inflation worries.

However, analysts suggest this surge was largely fueled by a rush to purchase before the expiration of government subsidies, which offered up to $7,500 off the price of certain electric vehicles. With the subsidy now gone, car manufacturers anticipate a downturn in sales.

“It’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought,” said Ford CEO Jim Farley. General Motors’ CFO added that the company expects a significant drop in EV demand in the coming months as it remains uncertain how quickly buyers will return.

Even with recent gains, the US remains a laggard in electric vehicle sales compared to the rest of the world. In the UK, nearly 30% of new car sales last year were battery-electric and hybrid, while in Europe it was about 20%. China leads with nearly half of its car sales last year coming from electric vehicles.

Policy Differences

The contrasting trajectory of EV adoption reflects weaker government support in the US compared to other regions. While the Biden Administration pursued policies aimed at increasing electric vehicle adoption, former President Trump’s initiatives aimed to roll back many of these measures, including the tax credit, arguing it forced consumers to buy unwanted vehicles.

Despite electric cars becoming more affordable in the US, their costs still exceed those of comparable petrol-powered vehicles. The average US electric car transaction price is over $57,000—16% higher than the overall car average—while competing models in the UK are available for under €20,000.

As the landscape continues to evolve, analysts point to pricing strategies as a critical factor shaping buyer decisions. Manufacturers are now faced with the challenge of adjusting prices alongside the expiration of the tax credit and existing tariffs on imports.

In response to these pressures, Hyundai plans to offset the loss of the tax credit with a price reduction, while Tesla anticipates increased lease payments for some models. Researchers predict the impact of tariffs combined with the loss of subsidies could lead to a contraction in EV investments.

Despite these challenges, some industry observers caution against hastily declaring that the US is falling behind in the evolving market. “Saying that we’re behind assumes that this is the only and best solution,” noted Stephanie Brinley from S&P Global Mobility.

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