The rise in electric vehicle (EV) sales in the US may seem promising, but the country is lagging in the global electric car market. In 2024, sales of battery-powered cars exceeded 1.2 million, and hybrids saw a threefold increase. However, analysts warn that this growth comes as buyers rushed to take advantage of government tax credits before they ended.
Sales Expected to Decline Post-Subsidy
Electric vehicle sales rose to 10% of overall sales in August, a record high. Major car manufacturers reported record electric sales; however, the end of the tax credit is expected to slow this momentum significantly.
Ford’s CEO noted the industry would continue to thrive but would be smaller than anticipated. General Motors’ CFO predicted a sharp decline in demand as buyers adjust to the absence of tax incentives.
US Lags Behind Global Competitors
Despite recent gains, the US is still behind key markets like the UK, Europe, and China in electric car adoption. In the UK, nearly 30% of new car sales were electric or hybrid. In China, almost half of total sales were electric vehicles last year.
Adoption rates are also high in countries like Norway and Nepal, while growth is rapid in Latin America and other regions. The US, however, has seen slower uptake due to weaker government support.
Policy and Pricing Challenges Ahead
Analysts attribute the slower adoption in the US to limited government incentives compared to countries like China and the UK. Former President Biden’s initiatives aimed to increase electric car market share, but Trump’s administration sought to dismantle many of those measures.
With electric vehicle prices averaging over $57,000, buyers face higher costs than conventional gas cars. The loss of tax credits, combined with tariffs on foreign vehicles, raises uncertainty for future electric car sales.
