Automakers in the US saw a sharp increase in new electric vehicle sales last quarter, boosting the industry despite ongoing uncertainty related to changes in US President Donald Trump's trade policy, UNN reports with reference to Bloomberg.
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Buyers rushed to take advantage of a $7,500 federal tax credit for electric vehicles, which expired on September 30. This led to a 21% increase in EV sales compared to the same period last year, reaching a record 10% of total deliveries, according to estimates from research firm Cox Automotive.
This dynamic prompted Cox to raise its forecast for seasonally adjusted annual sales volume to 16.1 million vehicles, after a more modest revision in June to 15.7 million.
Automakers, affected by policy changes in the US, are cutting EV production and adjusting their plans, adding more gasoline and hybrid models. This dynamic created a favorable market for EVs, as manufacturers rushed to sell off inventory, and lower interest rates helped some buyers overcome lingering concerns about affordability.
As stated, 2026 will be the first year in almost 15 years that the US federal government will not subsidize the purchase of new electric vehicles.
Most industry observers predict a slowdown in EV sales in the coming quarters, as without federal incentives, they remain more expensive than ICE vehicles. In August, the average selling price of EVs increased by approximately $9,000 compared to conventional models.
"I wouldn't be surprised if EV sales in the US drop to 5%," Ford Motor Co. CEO Jim Farley said in Detroit on Tuesday. The EV market will turn out to be "much smaller than we assumed."
Some EV proponents hoped that states, including California, would step in and replace federal EV tax credits. California Governor Gavin Newsom, a Democrat, dashed those hopes, stating on September 19 that his state would not replace the $7,500 federal EV tax credit.
According to Cox, Tesla Inc.'s Model Y and 3, Honda Prologue, Chevrolet Equinox, Hyundai Ioniq 5, and Ford Mustang Mach-e were among the biggest beneficiaries of EV sales growth in the first two months of the quarter. Ford, General Motors Co., Toyota Motor Co., and Hyundai Motor Co. continued to increase their overall market share during this period, while Stellantis NV, owner of the Jeep, Ram, Dodge, and Chrysler brands, experienced a slight decline.
Some buyers are concerned about price increases for 2026 models, as automakers seek to offset some of the costs associated with new tariffs. Based on trade agreements announced by Trump this summer, Cox estimates that the US government will collect about $100 billion in tariffs on imported cars, parts, and materials this year. According to Cox chief economist Jonathan Smoke, this could add $5,500 to the cost of an imported car and $1,000 to the cost of cars assembled in the US with imported components.
And new cars coming out in 2026 are already starting to show a premium, said Carlos Hidalgo, owner of two Chrysler, Dodge, Jeep Ram dealerships and a Hyundai dealership in California.
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