EV Sales Slump? Why The Transition Is Still On Track

Most headlines miss the most important number in the EV story: even with the recent plunge in monthly sales, electric vehicles are still tracking toward record annual sales in the U.S. this year.

That disconnect between scary short‑term data and solid long‑term growth is exactly where smart climate and clean‑tech decisions get made. If you’re running a business, a fleet, a utility program, or a city sustainability plan, you can’t afford to react to every monthly blip. You need to understand the trend.

This matters for green technology as a whole. Electric vehicles are one of the biggest levers we have for cutting transport emissions, stabilizing the grid, and scaling clean energy – and they’re increasingly shaped by software and AI. So when EV sales wobble, people start asking if the entire green transition is stalling.

Here’s the thing about the current EV “slump”: it’s mostly a policy shock and a timing issue, not a collapse in demand or technology. The transition is shifting into a more mature, cost‑driven phase — and that actually opens new opportunities for innovators, investors, and policymakers.

In this post, I’ll break down what’s really happening with EV sales, what it means for the broader green technology ecosystem, and how to position yourself for the next wave of growth.

1. What’s actually happening with EV sales?

EV sales fell hard right after federal tax credits were pulled. In October, U.S. dealers sold about 20% fewer used EVs and roughly 50% fewer new EVs compared with September. That’s a brutal month‑over‑month swing.

But cause and effect here are clear:

• Congress ended the federal EV tax credits ($7,500 for new, $4,500 for used) on September 30.
• Buyers rushed to purchase before the deadline, inflating summer numbers.
• After the cutoff, sales fell off a cliff.

So we’re not seeing millions of people suddenly deciding they hate EVs. We’re seeing what happens when a major price support disappears overnight.

Despite that shock, EVs are still gaining ground when you zoom out:

• EVs now make up around 8% of the U.S. auto market, up from 2.3% five years ago and 0.66% a decade ago.
• 2025 is still on track to be a record year for EV sales overall.

The pattern is classic S‑curve adoption: periods of rapid growth, pauses, policy shocks, and then a new, higher baseline. The long‑term trajectory hasn’t flipped; the slope just got a bit less steep.

The EV market hasn’t crashed — it’s maturing, with growth shifting from subsidy‑driven to cost‑ and value‑driven.

That’s a healthier foundation for any green technology.

2. Why this slump doesn’t break the EV transition

If you strip away the politics for a moment, three fundamentals still push EV adoption forward: cost, choice, and experience. All three are improving.

Costs are quietly doing the heavy lifting

Battery costs continue to fall, and that drives everything else. Batteries can be up to 40% of a vehicle’s total value. When that line item drops, manufacturers get room to:

• Cut sticker prices
• Improve range
• Add features without blowing up margins

Used EVs are where this becomes very real for everyday drivers. As of this fall, the price gap between used EVs and comparable gas cars is down to about $900. That’s close enough that total cost of ownership starts to dominate the decision.

EV owners typically:

• Don’t buy gasoline
• Skip routine services like oil changes
• See less brake wear thanks to regenerative braking

Over a 5–8 year horizon, that often outweighs a slightly higher purchase price. For fleets that track costs obsessively, the math is even clearer.

More affordable models are coming fast

Another key shift: choice is expanding, especially at lower price points.

Analysts expect that by the end of 2026, there will be around 16 electric models under about $42,000 in the U.S. market — roughly double today’s count. That includes updated versions of familiar nameplates like the Nissan Leaf and Chevrolet Bolt, not just luxury models or quirky niche cars.

A broader, cheaper product mix does three things:

• Gives mainstream buyers something that actually fits their budget and use case
• Supports more robust used‑EV inventory within a few years
• Forces lagging automakers to keep up or lose market share

Meanwhile, a wave of EVs coming off leases is about to hit used lots, which will further lower prices and spread adoption into the mass market.

The driver experience is hard to unsee

Once people live with an EV, many don’t want to go back. Common feedback I’ve seen and heard:

• “It’s just easier. I plug in at night and don’t think about gas stations.”
• “The instant torque ruins regular cars for you.”
• “I didn’t realize how much of my time I’d been wasting at gas pumps and service centers.”

On top of that, smart charging, apps, and increasingly AI‑driven energy management are turning EVs into mobile energy assets, not just cars. In our green technology series, this is where EVs intersect with smart grids and home energy systems: they’re becoming a core node in the clean‑energy network.

Once a technology delivers lower running costs and a better experience, subsidies matter less. That’s exactly where EVs are heading.

3. The real headwinds: policy, tariffs, and mixed signals

None of this means the EV market is on autopilot. The current slowdown does expose several real risks — and they’re mostly political and structural, not technological.

Policy whiplash from Washington

Congress didn’t just kill consumer tax credits. Lawmakers also rolled back multiple incentives and guardrails that had been nudging the industry toward cleaner vehicles:

• Manufacturing incentives for EVs and batteries were stripped, making it harder to justify new plants or retooling existing lines.
• Penalties for violating Corporate Average Fuel Economy (CAFE) standards were eliminated, letting automakers pump out more profitable, less efficient trucks and SUVs with fewer consequences.
• Under the Trump administration, the EPA revoked California’s waiver to set its own tougher tailpipe standards, creating regulatory uncertainty across the country.

Several of these moves are now in court, which adds another layer of hesitation for manufacturers trying to plan multi‑billion‑dollar investments with 10‑ to 20‑year time horizons.

Tariffs and global supply chains

At the same time, sweeping tariffs have raised costs across the auto sector. EVs are particularly exposed because so many batteries and battery materials are imported.

When a component that represents up to 40% of a car’s value gets hit with trade friction, that cost is hard to hide from the end buyer. It slows price declines and dampens one of the main adoption drivers.

Mixed signals to automakers

In response, some manufacturers have publicly slowed or scaled back their EV plans. They see:

• Weaker short‑term sales data
• Higher costs from tariffs
• Squeezed incentives
• A political environment that swings every election cycle

However, not all automakers are slamming the brakes. Some, like Hyundai and others, are still expanding their EV lineups and investing in domestic production. They’re reading the global market correctly: outside the U.S., EV demand and policy support remain strong.

That global dynamic matters. Automakers don’t design platforms for one country; they build global architectures. If Europe, China, and other regions keep moving toward electric, the product roadmap will follow — and the U.S. will get those models whether or not Congress is having a good year.

4. Where green technology and AI fit into the next EV wave

The current reset is pushing the EV market from “subsidy era” into “systems era.” That’s where green technology — especially software and AI — starts to carry more of the load.

Here’s what that looks like in practice.

Smarter charging, lower bills

As EV adoption grows, unmanaged charging can stress local grids. But with AI‑powered charging management, the opposite can happen: EVs become flexible, controllable loads that actually help stabilize the grid.

Practical examples include:

• Apps that automatically shift most charging to off‑peak hours, cutting home energy bills.
• Fleet charging systems that optimize schedules around electricity prices, route plans, and grid constraints.
• Vehicle‑to‑home (V2H) and vehicle‑to‑grid (V2G) solutions that turn parked cars into backup power or grid assets.

From a business perspective, this opens new revenue models: demand response programs, virtual power plants, and energy‑as‑a‑service offerings, all built around EV batteries.

AI‑driven planning and infrastructure

Cities, utilities, and charging networks are already using data and machine learning to answer questions like:

• Where should we place fast chargers to maximize use and minimize grid upgrades?
• How many chargers do we really need if we manage charging intelligently?
• Which neighborhoods risk being left behind without targeted investment?

Those are classic green technology problems: multi‑variable, high‑impact, and perfect for AI.

If you’re building products or services in this space, the EV sales slowdown shouldn’t scare you off. It’s a signal to focus on making EVs work better in the real world, not just on selling more units next quarter.

5. How businesses, fleets, and policymakers should respond

Most companies get this wrong. They either:

• Panic at every negative headline and freeze investment, or
• Assume adoption will continue at early‑stage growth rates forever.

The reality? EV adoption is still rising, but it’s entering a more pragmatic phase. Here’s how to approach it.

For fleets and large buyers

Use the current uncertainty to your advantage:

• Negotiate: Manufacturers and dealers with excess EV inventory are often more flexible on pricing and service packages right now.
• Pilot smart charging: Pair new EVs with intelligent charging software from day one. The operational data you collect will be gold later.
• Think lifecycle cost, not headlines: If the numbers pencil out over 5–10 years, don’t let one bad sales month spook you.

For policymakers and utilities

You don’t control federal tax credits, but you do control local conditions.

• Strengthen state and local incentives: Several states have already increased rebates after federal credits vanished. Well‑designed programs can keep adoption moving without breaking budgets.
• Invest in equitable charging infrastructure: Focus on multi‑family housing, rural areas, and lower‑income neighborhoods so the benefits of EVs aren’t limited to early adopters.
• Use data to plan smarter: Lean on modeling and AI tools to sequence grid upgrades, target charger locations, and forecast load.

For green tech and AI companies

This is a good time to double down, not pull back.

• Build tools that reduce total cost of ownership for EV drivers and fleets.
• Focus on interoperability: connect EVs to homes, buildings, solar, storage, and the grid.
• Help cities and utilities turn EV growth into a grid asset instead of a liability.

The companies that win the next decade won’t just sell hardware; they’ll orchestrate systems.

Where the EV story goes next

The short‑term EV sales slump looks dramatic on a chart. But when you step back, the story is much more straightforward: policy shocks created a temporary dip; cost curves, technology, and global demand are still pointing one way.

For the broader green technology transition, that’s actually good news. Rapid, messy growth is normal. The important question is whether the fundamentals are improving. On EVs, they are:

• Batteries keep getting cheaper.
• More affordable models are on the way.
• Charging is getting smarter.
• Total cost of ownership is trending in favor of electric.

If you’re working in climate, energy, or sustainable business, treat the current moment as a recalibration, not a retreat. Focus on solutions that make EVs easier to own, cheaper to operate, and better integrated into the clean‑energy system.

The transition is still on track. The next wave belongs to the people who plan for it now.