One Year After EV Tax Credit Expiration, Market Shows Slow Recovery
Used EV sales jumped 21% year-over-year in September as the sector rebounds from a post-incentive slump.
A year after the expiration of the $7,500 federal EV tax credit, the U.S. electric vehicle market is experiencing a gradual rebound from a sharp post-policy decline. While new car sales remain below pre-expiration peaks, used EVs are thriving, and industry leaders suggest the long-term trajectory toward electrification remains intact.
What Happened
The $7,500 tax credit ended on September 30, 2025, coinciding with the repeal of fuel economy regulations and other supportive policies. Following the deadline, EV sales experienced a significant drop; according to JD Power, the electric share of retail car sales fell from over 14% in September 2025 to 5% by November 2025. However, the market has since shown signs of stabilization. By September 2026, the EV share of retail sales had recovered to 7.9%, and overall U.S. EV sales grew by 6.1% quarter-over-quarter to reach approximately 262,000 units, according to Cox Automotive.
Why It Matters
The recovery is unevenly distributed, with Tesla and Rivian driving much of the recent growth. Tesla’s market share has climbed back above 50%, supported by high customer loyalty, while Rivian’s deliveries have surged due to the new R2 model. Conversely, legacy automakers have canceled or delayed roughly two dozen electric models, including the Ford F-150 Lightning and Volkswagen ID.4, as they pivot resources toward hybrids and internal combustion engines. Meanwhile, the used EV market has become a significant bright spot, with sales jumping 21% year-over-year in September 2026. Used EVs are now selling 12 days faster than their gas counterparts, and prices have risen nearly 10% over the last year, indicating strong consumer demand at lower price points.
The Bottom Line
Despite the initial shock of losing federal incentives, industry executives and analysts maintain that the shift to electric vehicles is delayed rather than canceled. With charging infrastructure expanding to over 80,000 DC fast charging ports and new affordable models expected to enter the market, the consensus is that EVs will continue to gain market share, albeit at a slower pace than originally projected.
