Are Electric Vehicles Really Dead in the US? Here’s What’s Actually Happening
Why Did US Electric Vehicle Incentives Disappear, and What Does That Mean for Buyers?
If you’ve been following the electric vehicle (EV) scene in the US, you’ve probably noticed a big shift. Not long ago, the government was all-in on EVs—offering generous purchase incentives and pushing carmakers to improve fuel efficiency. But with the Trump administration rolling back these policies, the landscape looks very different.
The $7,500 federal tax credit for new electric cars is ending, and fuel economy mandates have been relaxed. For buyers, this means fewer discounts at the dealership and less pressure on automakers to prioritize EVs over traditional gas-powered vehicles. The immediate effect? EVs are now more expensive compared to their gas counterparts. According to Kelley Blue Book, the average EV transaction price in May was $57,734, while the average for all new cars was $48,799.
But does this policy reversal spell the end for electric vehicles in America? Not quite. Let’s dig into what’s really going on.
Are Automakers Giving Up on EVs?
It’s tempting to think that carmakers are throwing in the towel on EVs. General Motors, for example, recently told investors it expects fewer EV sellers in the next few years and is investing heavily in its traditional internal combustion engine (ICE) lineup. Ford, GM, and Stellantis are all shifting focus back to their bread-and-butter: big pickups and SUVs.
Stellantis even brought back the Hemi V8 engine for its Ram pickup, while delaying its electric and range-extender models to 2026 and beyond. Honda and Nissan have also scrapped several planned electric models for the US market.
But here’s the nuance: this isn’t a total retreat. It’s more of a strategic pause. Automakers are recalibrating, not abandoning the EV race. They’re watching the market, waiting for costs to come down, and keeping an eye on what’s happening overseas.
How Does the US Compare to Europe and China on EV Adoption?
If you look at the numbers, the US is lagging behind. In June, EVs made up just 8.6% of new car sales in the US, down slightly from last year. In contrast, Europe’s EV market share hit 16% in the first half of the year, according to the European Automobile Manufacturers’ Association (ACEA). China’s numbers are even higher, with EVs and plug-in hybrids accounting for over 30% of new car sales in 2024, based on data from the China Association of Automobile Manufacturers.
Why the difference? Policy is a big factor. European and Chinese governments are still pushing hard for cleaner cars, with strict emissions targets and ongoing incentives. In the US, the pressure is off. The result: American automakers are less motivated to push EVs, especially when their most profitable products are still gas-guzzling trucks and SUVs.
What’s Happening to Tesla and Other EV Leaders?
Tesla remains the dominant player in the US EV market, accounting for about half of all sales in June. But even Tesla is feeling the pinch. The company’s revenue from selling emissions credits—a key income stream—was cut in half last quarter, dropping to $439 million. That’s because other automakers no longer need to buy as many credits to comply with relaxed regulations.
Tesla CEO Elon Musk has acknowledged the challenges, warning of rough quarters ahead as incentives dry up. Meanwhile, Ford slashed its commitment to buying EV credits by $1.5 billion, signaling a broader industry pivot.
Despite these headwinds, Tesla and other innovators aren’t standing still. They’re betting on new technology and lower costs to keep the EV dream alive.
Are High Prices and Tariffs Killing EV Demand?
Price is a huge hurdle. EVs are still pricier than comparable gas cars, and with incentives fading, the gap is even wider. Trade tariffs are making things worse, driving up costs for both domestic and imported vehicles. Cox Automotive analyst Erin Keating expects prices to keep rising through the summer as the impact of tariffs filters through the market.
But there’s a silver lining. Automakers are working to bring costs down by switching to cheaper lithium-iron-phosphate (LFP) batteries, which use fewer expensive metals. Ford’s upcoming affordable EVs, starting with a $30,000 pickup in 2027, are a sign that lower prices are on the horizon. GM’s Chevrolet Equinox EV, priced at $33,600, is already attracting buyers who might have balked at higher price tags.
Will American Drivers Ever Embrace Small, Affordable EVs?
There’s a stereotype that Americans only want big trucks and SUVs. While that’s partly true—these vehicles are hugely popular—there’s growing interest in smaller, more affordable EVs, especially for commuting and city driving. Ford CEO Jim Farley calls this the “Model T moment” for EVs, pointing to a future where simple, inexpensive electric vehicles become the norm.
Startups like Slate are jumping in, too, with bare-bones electric trucks designed for practicality and low cost. The trend toward electric golf carts as suburban runabouts hints that Americans aren’t anti-EV—they just want options that fit their budgets and lifestyles.
What About Charging Infrastructure and Range Anxiety?
Range anxiety is still a thing, but it’s getting better. The US government had planned to invest $5 billion in expanding the charging network, and while some of that funding is in limbo, the private sector is stepping up. Tesla’s Supercharger network is expanding, and other companies are building fast-charging stations along major highways.
Plus, electricity in the US is relatively cheap, making EVs more affordable to run than gas cars. For many drivers, especially those who can charge at home or work, the convenience and savings are real.
Are US Automakers at Risk of Falling Behind International Rivals?
This is the big question. While American companies are taking a breather, Chinese and European automakers are racing ahead. Ford’s Jim Farley sees Chinese brands like BYD and Geely as the real competition for the next generation of EVs. Right now, Chinese EVs are effectively blocked from the US market by high tariffs, but few expect that to last forever.
If US automakers don’t figure out how to build affordable, high-quality EVs, they risk losing out when the global market shifts decisively toward electric.
So, Are EVs Really Dead in America?
Not by a long shot. The US EV market is in a state of flux—slowing down, yes, but not flatlining. Automakers are regrouping, looking for ways to make EVs profitable without government help. Consumers are waiting for prices to drop and charging to get easier. The technology is evolving, and the competition is heating up.
The outcome? Expect a bumpy ride for the next few years. But as battery costs fall and new models hit the market, EVs will almost certainly make a comeback—maybe not as quickly as in Europe or China, but in a way that fits the unique quirks of the American car market.
For now, the best advice is to keep an eye on the affordable EVs coming down the pipeline. If you’re thinking about making the switch, the next few years could bring some surprisingly good options—especially if you’re open to something a little smaller, a little simpler, and a lot more electric.