According to the latest report from Cox Automotive’s Kelley Blue Book, new EV sales in the U.S. saw a slight dip, falling 6.3% year-over-year to 310,839 units. This was right in line with Cox Automotive’s predictions.
While Q2 sales were down compared to the same period last year (when 331,853 EVs were sold), they did tick up 4.9% from Q1 2025. In fact, the first half of 2025 actually set a new record for EV sales, reaching 607,089 units – a 1.5% increase over the first half of 2024.
More Than Just Numbers: Understanding the Downturn
“Lower EV sales last quarter underscore the market’s ongoing challenges, as growth in the auto business ebbs and flows on consumer demand,” explains Stephanie Valdez Streaty, senior analyst at Cox Automotive. “The year-over-year decline in Q2 was only the third decline on record, and a sign of a more mature market.”
This Q2 dip happened despite some favorable conditions, including healthy inventory levels, more than a dozen new EV models hitting the market, and strong sales incentives. In June, these incentives reached an all-time high of 14.8% of the average transaction price (ATP), which translates to nearly $8,500 per vehicle.
The bump in Q2 sales over Q1 might be a short-term surge. With federal EV incentives set to expire in September, and economic pressures continuing to build, the second half of the year is shaping up to be a crucial test for EV demand. Valdez Streaty predicts, “Q3 will likely be a record, followed by a collapse in Q4, as the electric vehicle market adjusts to its new reality.”
The Big Players: GM Charges Ahead, Tesla Takes a Step Back
In the U.S. EV market, the first half of 2025 saw two major movements from industry giants: General Motors and Tesla.
After some initial delays, GM is now a serious contender. They’re consistently rolling out a strong lineup of EVs across their Cadillac, Chevrolet, and GMC brands. In the first half of 2025, GM sold over 78,000 EVs, more than doubling their 2024 volume. This surge helped Chevrolet become the No. 2 best-selling EV brand in the U.S. by the end of H1, surpassing both Ford and Hyundai. As a result, GM’s share of total EV sales grew to 12.9%, solidifying its position as the No. 2 EV player behind only Tesla.
On the other hand, Tesla experienced a decline. While GM gained more than 6 percentage points of market share, Tesla gave away a similar amount. Their sales volume dropped by over 12% year-over-year in Q2, following a nearly 9% decline in Q1. Tesla’s share of both total U.S. vehicle sales (3.4%) and the overall EV market (44.7%) has decreased year-to-date in 2025. The increasingly competitive EV market is proving to be a tough environment for the EV pioneer.
A New Reality: The Impact of Fading Incentives
The EV market landscape shifted dramatically at the start of Q3. Effective October 1, the federal tax incentives of up to $7,500 for qualifying new EV sales will be gone. The popular “leasing loophole,” which significantly broadened the pool of eligible sales, has also been closed. Even funding for crucial infrastructure improvements has been curtailed.
The Rise of the Used EV Market
With changes in new EV incentives, the used EV market is now gaining significant traction. Retail used EV sales in Q2 surpassed 100,000 units, setting a new record and showing accelerating growth.
While government incentives on used EVs have also been eliminated, Cox Automotive research indicates that only about one-third of used EVs qualified for these incentives anyway. As new EV incentives are expected to fall and availability of used EVs grows, this segment of the market may see even faster growth in the coming quarters.
Looking Ahead: Slower Growth, But Still Growing
Despite these adjustments, Cox Automotive still believes that new EV sales will continue to expand in the U.S., though the growth trajectory has been curbed. Expectations for total new EV sales in the U.S. for 2025 have been lowered from approximately a 10% share of total sales to an 8.5% share, with volume expected to remain flat year-over-year.
Meanwhile, the global EV market continues its rapid transformation. In the first half of 2025, over 3 million EVs were sold in China, and exports accelerated, highlighting the continued global momentum in the electric vehicle industry.
