The US electric vehicle market experienced a slowdown in the second quarter of 2026, with new EV sales falling by 20% to 25% compared to Q2 2025, according to various reports. Despite a 15% to 20% increase in sales from Q1 2026, the year-over-year decline highlights a challenging environment for EVs, with some sources reporting around 247,000 to over 275,000 units sold in the quarter. This dip follows the expiration of the federal EV tax credit in Q3 2025, which had previously inflated demand. The share of EVs in the US new-car market also decreased from an average of 10% in 2025 to about 7% in early 2026.
Automakers like GM and Ford are increasingly reducing their discussions about EVs in earnings calls and have altered or delayed EV production plans. Ford's EV sales dropped over 57% in the first half of 2026 and its EV and software operations lost $919 million in Q2. Other brands also saw significant declines: Ford F-150 Lightning sales dropped 40%, Volvo's EV sales fell 41%, Mercedes' plunged 58%, and Nissan's plummeted 88% in Q2 year-over-year. This has led to a clearer understanding for the industry regarding the pace and types of vehicles to produce, shifting focus from policy-driven demand to product and price.
Despite the overall decline in new EV sales, the market is showing signs of recovery, with the second quarter's drop being less severe than previous quarters. Tesla emerged as a significant beneficiary of this modest rebound, accounting for one in three new EVs purchased in Q2 2026 and roughly half of all US EV sales, driven primarily by the Model 3 and Model Y. Toyota and Subaru also saw substantial growth, with sales increasing by 225% and 108% respectively. Used EV sales hit a record, and hybrids are driving the overall electrified vehicle market, with sales climbing 26.2% year-over-year in Q2 and outselling BEVs and PHEVs nearly two to one.
