The US Electric Car Market: Gaining Ground but Falling Short Globally

Fri Oct 10 2025 15:02:53 GMT+0300 (Eastern European Summer Time)

Despite a surge in electric vehicle sales, the US lags behind global markets in adoption and growth, hindered by government policies and high prices.

Sales of electric vehicles in the United States have soared recently, but the country still falls behind other global markets in overall adoption. Government incentives have driven a temporary boost in sales, but analysts foresee declines as subsidies end and tariffs on foreign vehicles remain in place. Without more robust policies and competitive pricing, the US risks losing its place in the rapidly evolving global electric car landscape.

You could be forgiven for thinking that electric cars might finally be gaining momentum in the US. After all, sales of battery cars topped 1.2 million last year, more than five times the number just four years earlier. Hybrid sales have jumped by a factor of three.

Battery-powered cars accounted for 10% of overall sales in August - a new high, according to S&P Global Mobility. And in updates to investors this week, General Motors, Ford, Tesla and other companies all reported record electric sales over the past three months. This marked a bright spot in an industry wrestling with the fallout from still high interest rates and buyers on edge over inflation, tariffs and the wider economy.

But analysts say the boom was caused by a dash to buy before the end of a government subsidy that helped knock as much as $7,500 (£5,588) off the price of certain battery electric, plug-in hybrid or fuel cell vehicles. With that tax credit gone as of the end of September, carmakers are expecting momentum to shift into reverse. It's going to be a vibrant industry, but it's going to be smaller, way smaller than we thought, said Ford chief executive Jim Farley. I expect that EV demand is going to drop off pretty precipitously, General Motors CFO Paul Jacobson warned.

Even with the recent gains, the US, the world's second biggest car market, stands out as a laggard in electric car sales compared to much of the rest of the world. In the UK, for example, battery electric and hybrid cars made up nearly 30% of new sales last year, while in Europe, they accounted for roughly one in five sales. In China, nearly half of all sales were electric, and that is expected to grow even more.

Adoption in the US has been slowed by comparatively weak government support, which has limited subsidies, trade-in programs, and rules that helped the industry in countries like China and the UK. Former President Biden aimed for electric cars to account for half of all sales in the US by 2030, adding consumer incentives and pushing for better infrastructure. However, policies from the previous administration have called many of those initiatives into question.

Electric cars in the US, while becoming more affordable, still retain a higher price compared to traditional gasoline vehicles. As of August, the average price for an electric car was over $57,000. High tariffs on imported electric vehicles from China further complicate the landscape, limiting competitive pricing and stalling adoption.

Looking ahead, much depends on how automakers adjust pricing strategies in this new market reality, especially without the support of tax credits. Analysts suggest a tough road ahead for EV sales in the US, with expectations of declines and fluctuations in the growth trajectory of the electric vehicle segment.