US Electric Vehicle Sales Dip After Tax Credits Expire

Battery electric vehicles lost significant ground in the United States following the expiration of federal tax credits, with their share of new car sales falling from 10% to 6%. Conventional gasoline-electric hybrids — vehicles that do not charge from the grid — picked up much of that slack, reaching 16% of new vehicle sales in the third quarter of 2026.

The overall share of electrified vehicles edged down to 23% in Q3 2026 from 24% in the same period a year earlier, according to an Energy Information Administration analysis based on Omdia data. Buyers who moved away from battery-only models shifted mainly to non-plug-in hybrids, which had not been eligible for federal clean vehicle support programs.

Prices compounded the pressure. The average new vehicle transaction price surpassed $50,000 for the first time this year, according to Kelley Blue Book, slowing momentum even in the hybrid segment.

The premium market — roughly 12% of US light-vehicle sales — showed a notable shift: pure battery models fell to 12% of premium-segment sales in Q3 2026, compared with 31% in the same quarter of 2025, when incentives were still active.

Two federal credit programs — one covering individual buyers and another for commercial clean vehicle purchases — expired on September 30, 2025. Despite the year-on-year swings in new-car data, the broader adoption picture remains modest: as of 2024, battery electric vehicles made up only about 2% of all registered light vehicles on US roads.

Source: EIA Today in Energy