ELECTRIC VEHICLES ARE IN TROUBLE AFTER TRUMP KILLED TAX CREDITS

The Trump administration eliminated the $7,500 federal tax credit for electric vehicles effective October 1st. That move came as part of a widespread effort to roll back clean vehicle subsidies and emissions regulations. The administration also effectively ended CAFE emissions fines.

The $7,500 federal tax credit was a vital incentive for many mass-market EVs. It made Tesla vehicles like the Model Y far more affordable and competitive with combustion alternatives. A commercial vehicle sales loophole allowed manufacturers to roll over the $7,500 credit toward offering cheap lease deals. Analysts predicted an immediate and dramatic decline in EV sales after the Trump administration revoked the tax credit. Ford CEO Jim Farley predicted that EVs would lose half their market share, which had climbed to 8.1% by 2024.

We don’t have the complete EV sales numbers yet. Many automakers only report their figures quarterly. And some key EV manufacturers, such as Rivian and Tesla, do not differentiate vehicle sales by model. But the early returns suggest that revoking the tax credit could be an unmitigated disaster for an EV market that was already stagnating.

The Available Electric Vehicle Sales Data From October 2025 Looks Distressing

Sales return data so far is limited, but the data we do have looks bleak. Korean brands Hyundai and Kia are prime examples. Hyundai sold just 1,642 Ioniq 5s in October 2025. That sales total represented a 63% year-over-year decline from the previous October. For perspective, Ioniq 5 sales were up 36% year-over-year through the end of September. Hyundai sold just 398 Ioniq 6 sedans, a 53% year-over-year drop. And Hyundai also sold only 317 units of the new and long-awaited Ioniq 9 three-row crossover – the brand’s new electric take on the Palisade.

October showed a similar sales story at Hyundai’s sister brand Kia. Hyundai sold only 708 units of the EV6 crossover, which was a 71% year-over-year decline. The story was similar for Kia’s EV9 three-row crossover, the 2024 World Car of the Year. Kia sold only 666 of them in October, which was a 66% year-over-year drop. How did things fare at non-Hyundai Motor Group manufacturers, you ask? Well, Toyota sold only 37 electric vehicles in the United States in October, for both the Toyota and Lexus brands combined.

Poor October sales showings may even out a bit. It stands to reason that many folks who usually would have purchased an EV in October would have pushed their purchases to August and September to take advantage of the still-existing credits. However, Hyundai and Kia's responses do not suggest that the brands believe those numbers are nothing to worry about long-term.

Hyundai lowered the MSRP on the Ioniq 5 dramatically. Some trims received as much as a $9,800 discount. The top-level Limited AWD trim for the standard Ioniq 5 starts for under $50,000. Kia did not lower the starting MSRP for its EVs, but the company is offering a $10,000 discount on both the EV6 and EV9, as well as the Niro EV.

Manufacturers Are Already Canceling or Considering Canceling EVs

The federal EV tax credit’s demise is not the only financial pressure affecting electric vehicles. American import tariffs, for example, have dipped into profit margins and made certain vehicles — like the Chinese-built Polestar 2 — untenable prospects for the American market. But not having an additional $7,500 in subsidies for purchases and leases thanks to the Trump administration appears to be exacerbating some tough decisions for manufacturers.

Nissan is still committed to EVs in the United States with the new Leaf. But the Japanese brand informed dealers it would stop importing its Ariya electric crossover to the U.S. in September. September saw Acura cancel the ZDX, a rebadged variant of the GM-built Honda Prologue electric crossover, citing market conditions. Acura had only just launched the ZDX in 2024. Hemi V8-reviving Ram also changed course in September, eliminating the all-electric Ram 1500 REV that had been in development. GM also nixed the BrightDrop van in October, citing lower-than-expected commercial EV sales.

More tough decisions on EVs may be looming. Kia is still bringing its affordable South Korean-built EV4 electric sedan to Canada in 2026. But the brand has postponed an American launch indefinitely — a move that may become permanent. The Ford F-150 Lightning may be America’s best-selling electric pickup, but that may not be enough to keep it in the lineup. The brand is reportedly having “active discussions” about curtailing its production early.

Momentum Was Already Slowing Before The Trump Administration

In the early 2020s, electric vehicle sales growth appeared to be on an exponential growth curve. The question for shareholders was not whether brands should go all-electric. It was whether brands could go electric quickly enough to compete with Tesla. Most luxury brands made ambitious pledges to convert entirely to EVs by 2030, to curtail combustion engine development, and to have a mature EV lineup in place in the intervening years.

By the mid-2020s, that consensus shifted. Instead of exponential growth, the EV market seemed to run out of early adopters, slowing the rate. Instead of an inexorable rise, manufacturers were facing a slower, more expensive slog toward electrification. Maintaining steady growth would require active and costly investment in marketing EVs, improving EVs, and providing the infrastructure to support EVs in a way that would make sense for conventional buyers.

Nearly every manufacturer that pledged to be electric by 2030, such as Mercedes, Lexus, and Volvo, has backed away from that pledge. Other manufacturers have lowered their targets and reduced their investments in electric vehicles. Combustion vehicles like the Cadillac CT5, which were supposed to give way to electric cars, are getting new life with next generations.

The Future Of Electric Vehicles In America Remains Very Uncertain

Cars take years to develop. Automakers prefer to plan lineups out well in advance. But with electric vehicles, automakers will not have that luxury. The picture looks bleak for pure EVs right now. But battery technology will continue to improve and drive down costs toward parity with combustion vehicles. The mid-2020s are different from the early 2020s for EVs, but political support and broad public sentiment could shift wildly once again. The Magic 8 Balls' response to how things will look with electrification by the end of the 2020s is “Ask Again Later.”

Facing uncertainty, the byword for manufacturers for the next few years will be flexibility. The near future may look a lot like the Mercedes CLA, with even EV-native platforms ready to pivot from combustion to electric and all manner of hybrids (conventional, plug-in, range-extender) in between, depending on what the market dictates.

Sources: CNBC, Bloomberg NEF, respective automakers.

2025-11-15T12:09:43Z