New electric vehicle (EV) sales in the U.S. dropped 6.3% year-over-year in the second quarter of 2025, totaling 310,839 units, according to Cox Automotive’s Kelley Blue Book. The decline came despite increased incentives, new model launches, and healthy inventory levels. However, EV sales still rose 4.9% from Q1, bringing first-half volume to a record 607,089 units, up 1.5% from the same period in 2024. Analysts expect a sharp uptick in Q3 as buyers move quickly to secure federal tax credits before they expire on Oct. 1.
General Motors more than doubled its EV volume in 2024 and surpassed Ford and Hyundai to become the second-largest EV brand in the U.S. Tesla, by contrast, saw its Q2 sales fall by over 12% year-over-year and continues to lose market share.
Cox Automotive now forecasts EVs will make up 8.5% of all new vehicle sales in 2025, down from earlier projections of 10%. Meanwhile, the used EV market is gaining speed, with Q2 retail sales topping 100,000 units for the first time.
Here’s why it matters:
With the federal EV tax credit set to expire in Q3, dealers have a limited window to sell new inventory while incentives are still active. Those prepared to meet a short-term spike in demand can capitalize, but they should also plan for a likely slowdown in Q4. GM’s momentum, Tesla’s decline, and the rising importance of the used EV market all signal a shift in how consumers are buying electric vehicles. Dealers should closely monitor these trends as the remainder of 2025 unfolds.
Key takeaways:
- Q2 EV sales fell despite record-setting first half
Sales dropped 6.3% year-over-year in Q2 but rose 4.9% from Q1, pushing the first-half total to a record 607,089 units, a 1.5% increase over 2024. - Federal tax credits end Oct. 1
New EV tax credits and the leasing loophole are set to expire in Q3, likely triggering a short-term sales spike before a significant decline in Q4. - GM surges while Tesla slips
GM sold over 78,000 EVs in the first half, growing its market share to 12.9%, while Tesla’s sales fell over 12% and its share dropped to 44.7%. - EV incentives hit record levels
In June, average incentives reached nearly $8,500 or 14.8% of the average transaction price, underscoring the effort to maintain sales momentum. - Used EV market hits new milestone
Retail used EV sales topped 100,000 units in Q2, and with more availability and lower prices, this segment is expected to continue growing.
