It’s a strangely tempting time to buy an electric car in America right now.
There are more options than ever with generous federal and state tax credits, plus big discounts from automakers. Charging networks are expanding quickly and if you’ve driven a modern EV from any brand, you’d know they’re far better to own and drive than their gas counterparts.
And yet, EV sales in the U.S. just slipped for the first time in 14 months. What gives?
In the Friday edition of Critical Materials, we talk about how EVs are caught in a perfect storm that may be stalling momentum. Also on our radar: A fight in Congress could kill key battery manufacturing credits, threatening tens of thousands of American jobs that could damage several Republican-dominated states and districts.
And while EV sales in the U.S. slow down, global EV demand continues to grow—China sold nearly as many EVs in May alone as the U.S. did in all of last year.
30%: America’s EV Sales Cool In April
Photo by: Hyundai
After years of rapid growth and consecutive quarters of record EV sales in the U.S., demand seems to have cooled in April for the first time since February 2024. April EV registrations reached 97,833 units, a 4.4% year-over-year decline, according to S&P Global Mobility data cited by Automotive News.
America’s EV market share also dropped from 7.4% to 6.6%. While the trend is concerning, it’s not necessarily surprising or alarming. The Trump administration, despite once having Tesla CEO Elon Musk on its team, is attacking EVs in all ways possible, ambushing the industry and stalling its growth.
Before we reiterate the administration’s tactics to kill EVs as well as the global headwinds, let’s talk some more numbers, because not every carmaker is suffering.
Tesla’s U.S. EV registrations dropped below 40,000 units in April, marking a 16% decline. Chevrolet, on the other hand, is now America’s second-best-selling EV maker—but still far behind Tesla in the second spot—at 9,160 units, managing a 215% year-over-year growth. So this is mostly a case of winners and losers.
All mainstream General Motors brands are going well, with Cadillac and GMC also clocking serious year-over-year growth. What’s shocking is BMW surpassing Hyundai in April EV sales, with the Korean automaker now clocking back-to-back months of decline—that’s despite offering far more affordable and modern options than BMW does and throwing heavy discounts on them.
Apart from Hyundai and Tesla, the other big automakers facing declining EV sales were Ford, Kia, Rivian and Mercedes-Benz.
EVs are really caught in a perfect storm right now. The Trump administration’s budget bill aims to slash federal credits for consumers and for the manufacturing of EVs and battery plants. It passed in the House and now its fate rests in the hands of the Senate.
Moreover, Congress passed a bill—which the president signed on Thursday—to block California from phasing out gas-only vehicles from 2035. Eleven other states including Colorado, New York and New Jersey were also following California emissions rules, so those states are impacted, too—all of them have high EV adoption rates.
There’s another key reason hurting EV sales, S&P Global Analyst Tom Libby told Automotive News:
Libby said that in addition to anxiety over charging and range, consumers are seeing media reports that government support for EVs is on the chopping block and automaker investments in the technology are slowing, undermining confidence in a product that doesn’t yet have significant organic demand. EVs are often popular at launch when they have strong promotions and fresh looks, then they fade out, he said.
It’s true that the administration acts and then the media amplifies all of that. They’re succeeding in their messaging, flooding the digital town squares and the news cycles with their vision for the auto industry, then backing it up with legislation in Congress. The exact same thing was happening last year with the pro-EV Biden administration, of course in favor of EVs.
Whether this sales slump will linger or prove temporary is anyone’s guess. But when EVs are priced right in popular segments, they sell—just look at the Tesla Model Y or the Chevy Equinox EV. And with more affordable models from both brands on the horizon, it’s far too soon to count out the EV market.
60%: American Jobs At Risk In Republican States
Photo by: Patrick George
Billions in battery plant investments were supposed to make the U.S. auto supply chain less dependent on China and create tens of thousands of good-paying jobs along the way. But now, Congress is threatening to repeal the manufacturing tax credits that helped get those projects off the ground.
The fallout is already being felt. Some $14 billion worth of clean energy projects have been canceled this year alone, as the nonprofit Zero Emissions Transportation Association (ZETA) points out. And it could get much worse.
The International Council on Clean Transportation (ICCT) projects the U.S. could lose 130,000 jobs by 2030 if the credits are scrapped. Ironically, Republican-led states like Michigan, Texas, Tennessee, Kentucky and Georgia stand to lose the most.
If the tax credits are scrapped, job losses are expected across multiple sectors, from vehicle assembly and parts manufacturing to battery production and charging infrastructure installation and maintenance.
90%: The Rest Of The World Is Running Away With EVs
Photo by: Kevin Williams/InsideEVs
China sold 1.3 million EVs and plug-in hybrids in May alone, nearly as many as the U.S. sold in all of 2024. Let that sink in.
Global EV sales jumped 24% last month, which really must sting for a very solipsistic U.S. While the rest of the world races ahead with high-tech cars, U.S. automakers are being forced to crank out more polluting gas trucks and SUVs instead.
As Reuters notes, the surge was driven by BYD’s booming exports to Mexico and Southeast Asia, plus strong demand across Southern Europe. Meanwhile, North American sales took a hit—thanks in part to Canada ending its EV subsidies.
100%: Is This A Temporary Or Prolonged EV Sales Drop?
Photo by: Kia
Despite generous discounts on high-tech EVs, sales are showing signs of cooling in America. But let’s not forget that there are still some excellent EVs to choose from and more are on the way. Think the next-gen Chevy Bolt, smaller Teslas and other affordable models that could shake things up.
It’s also worth noting that early-year sales are typically slower than the fall, when holiday deals pull buyers into showrooms.
So what do you think? Will EV sales level off and then grow on the S-curve, or are we heading into a prolonged slump?
Have a tip? Contact the author: suvrat.kothari@insideevs.com
