Inventories are backing up
As widely forecast, sales of new electric vehicles (EVs) in the U.S. fell sharply in the fourth quarter, following record-breaking results in Q3. With government-backed sales incentives revoked at the start of October, total EV sales in Q4 plunged to 234,000 units, down 46% compared to Q3 and 36% lower year over year. Sales in the final quarter of 2025 were at the lowest point since Q4 2022.
While the Q4 collapse will command headlines, total EV sales in calendar year 2025 tell a different story: Thanks in part to record volume in Q3, total EV sales last year came in just shy of 2024’s 1.30 million. In fact, 2025 was the second-best year on record for EV sales in the U.S., and the EV share of total market sales was a strong 7.8%, down from 8.1% a year earlier, according to Kelley Blue Book estimates.
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