EV sales just fell sharply, but the long-term shift to electric transport is still on. Here’s why — and how climate-focused teams can use this moment to get ahead.
Most headlines miss a crucial detail about the recent electric vehicle slump: 2025 is still on track to be a record year for EVs in the U.S.
Sales of new electric cars fell about 50% from September to October after federal tax credits were abruptly cut off. Used EV sales dropped around 20% in the same window. On paper, that looks like a crisis.
Here’s the thing about EV adoption: it doesn’t move in a straight line. Policy shocks create spikes and dips, but the long-term curve is still bending electric. For climate-focused businesses, utilities, and city leaders, this matters a lot more than a scary one-month chart.
In this Green Technology series, we’ve been tracking how clean hardware and smart software reshape energy, transport, and cities. EVs are right at the center of that shift. So let’s look at what this slowdown really means — and how to turn it into an advantage instead of a setback.
1. What Actually Happened to EV Sales?
EV sales fell hard after Congress ended federal tax credits early, but the underlying market is still growing.
When lawmakers voted to cancel the federal EV tax credits as of September 30, buyers reacted exactly how you’d expect: they rushed to get in under the wire, then pulled back sharply once the incentives disappeared.
- New EV sales: down about 50% from September to October
- Used EV sales: down about 20% in the same period
That drop wasn’t a sign that consumers suddenly stopped liking electric cars. It was a textbook policy shock.
Even with that dip, EVs are still on track for record annual sales in 2025 and now sit at roughly 8% of the U.S. light-duty vehicle market, up from 2.3% five years ago and well under 1% a decade ago. That’s what long-term growth looks like: noisy month-to-month, but unmistakably upward.
The reality? This is a reset, not a collapse.
For climate-conscious organizations, that means two things:
- Don’t base strategy on one quarter of data
- Do pay attention to how vulnerable EV demand is to policy
If incentives can swing sales by double digits in a month, smart players will design plans that work with that volatility instead of being surprised by it.
2. Why the EV Slowdown Isn’t the End of Electrification
EV adoption is shifting from an early-adopter sprint to a slower, more durable phase driven by cost, choice, and total ownership savings.
Analysts who live in this market every day largely agree: growth will continue, but probably at a more gradual pace. That’s not bad news. It’s what usually happens when a technology starts leaving the hype cycle and becoming normal.
Three fundamentals are still pointing the right direction:
2.1 Vehicle prices are dropping — especially used
Battery costs keep falling, and that’s the most expensive part of an EV. As a result:
- New EVs are getting cheaper year over year
- The price gap between used EVs and used gas cars has shrunk to around $900
- A wave of off-lease EVs is hitting the market, adding lots of relatively new, lower-cost options
In China, electric versions of popular models already undercut gas equivalents. That’s a preview of where the U.S. market is headed, even with today’s political headwinds.
2.2 More affordable models are coming
Automakers are not walking away from electrification — they’re adjusting the mix. By the end of 2026, analysts expect around 16 EV models under about $42,000, roughly double today’s count.
That matters for adoption. You can’t reach mass-market buyers with only luxury SUVs and pickup trucks. A broader lineup of smaller, cheaper models is exactly what the market needs.
2.3 EVs win on total cost of ownership
Even when sticker prices are higher, EVs often save money over the life of the vehicle because:
- Electricity is usually cheaper per mile than gasoline
- EVs avoid oil changes and many engine-related repairs
- Brakes last longer thanks to regenerative braking
If you’re operating a fleet or advising corporate sustainability teams, this is the metric that counts. Total cost of ownership (TCO) is where EVs quietly beat internal combustion engines — and why most large fleets eventually transition, regardless of short-term sales noise.
3. Policy Whiplash: The Real Risk Behind the Numbers
The biggest threat to EV adoption right now isn’t consumer interest. It’s policy instability.
The recent U.S. pullback hit from several angles:
- Federal consumer EV tax credits were eliminated years earlier than scheduled
- Manufacturing and battery incentives were also rolled back, making domestic production less attractive
- Penalties under federal fuel economy rules were removed, making it easier for automakers to keep selling high-margin, low-efficiency trucks and SUVs
- California’s authority to set its own tougher tailpipe standards was revoked, triggering lawsuits and years of uncertainty
At the same time, new tariffs on imported batteries and EV components are pushing up costs across the industry. Because batteries can make up up to 40% of an EV’s value, this hits electric models disproportionately hard.
For anyone planning around green technology — from city planners to utility execs — this is the real lesson:
Clean tech markets grow fastest when incentives, standards, and trade policy point in the same direction.
When they don’t, you still get growth, but it’s bumpier and slower. Climate leaders should be planning for both scenarios.
3.1 How automakers are reacting
Some manufacturers have responded to the policy mess by scaling back or delaying EV plans. Others haven’t flinched.
Companies like Hyundai and several European automakers are still expanding their electric lineups and investing in new plants. Why? Because they’re looking at global demand, not just a single election cycle in one country.
EVs are gaining market share in Europe, China, and many emerging markets. If you’re building cars for a global customer base, you don’t halt your EV pivot every time a subsidy changes. You optimize around a future where electric is the default.
4. State Policy, Smart Tech, and the New EV Opportunity
While federal incentives retreat, states and technology are quietly keeping the transition alive — and opening up new ways to create value.
4.1 States are stepping into the gap
Several states have increased their own EV incentives since the federal credits disappeared:
- Colorado raised its rebates by around $3,000
- Connecticut added roughly $500
- In total, at least 17 states now offer EV purchase incentives
If you’re a business or public agency, that patchwork is actually an opportunity:
- Fleets can prioritize deployments in high-incentive regions
- Utilities and cities can pair EV programs with state rebates to stretch public dollars further
- Dealers can tailor offers by ZIP code to match local policy
The incentives map has changed; the strategy should change with it.
4.2 EVs as grid assets, not just cars
From a green technology perspective, the most underrated part of this story is how EVs connect to the energy system.
Electric vehicles are batteries on wheels. Paired with smart software and modern chargers, they can:
- Charge when renewable power is abundant and cheap
- Pause or slow charging when the grid is stressed
- In some cases, push power back to homes, buildings, or the grid (vehicle-to-home and vehicle-to-grid)
That’s where AI and data-driven control come in. The same algorithms that optimize data centers and factories can orchestrate thousands of EVs:
- Predicting driving behavior and charging needs
- Aligning charging with wind and solar output
- Minimizing peak demand charges for fleets
A temporary slowdown in car sales doesn’t change this trajectory. If anything, it buys time to put smarter charging infrastructure and grid integrations in place before tens of millions more EVs arrive.
4.3 Practical moves climate-focused teams can make now
If you’re responsible for sustainability, operations, or strategy, this is a good moment to:
- Lock in pilots: Start small EV fleet or employee charging pilots while vehicles and chargers are relatively easy to secure.
- Model TCO with real data: Use live fuel, maintenance, and tariff data to compare EV and gas vehicles by route or use case.
- Design flexible charging: Build in smart charging and future vehicle-to-grid capabilities from day one.
- Align with state incentives: Map your operations against where state-level EV rebates, infrastructure grants, and clean transportation programs are strongest.
This is how you turn a policy-induced slowdown into strategic breathing room.
5. What This Means for the Future of Green Technology
Electrified transport is still one of the fastest, most scalable ways to cut climate pollution — even in a choppy policy environment.
Transport is a major slice of global emissions. Shifting cars, trucks, and buses from fossil fuels to clean electricity doesn’t just reduce CO₂; it also slashes local air pollution, lowers noise, and pairs naturally with the rise of solar, wind, and battery storage.
In the broader green technology story, EVs aren’t an isolated gadget. They’re a flexible, software-defined device plugged directly into the energy transition. As AI and advanced analytics mature, the value of each additional electric vehicle grows:
- Better forecasts mean smarter charging
- Smarter charging means lower grid costs
- Lower grid costs enable more renewables
- More renewables make EVs even cleaner over time
So yes, the U.S. just experienced a painful EV sales drop. But zoom out, and three things are still true:
- EV market share keeps rising over multi-year periods
- Costs are falling, especially for used vehicles
- Global demand is strong, pushing manufacturers to stay the course
If you care about climate impact, this isn’t the moment to retreat from electrification. It’s the moment to build the systems — pricing, software, infrastructure, and policy — that make the next wave of EV growth more resilient and more valuable.
The next question for every climate leader is simple: when EV sales rebound, will you be scrambling to catch up, or already set up to benefit?