EV Buyers Flood Showrooms, Fueling Carmaker Sales Surge

Electric Vehicle Sales Surge Amid Policy Shifts and Market Dynamics

Carmakers such as General Motors Co., Ford Motor Co., and Hyundai Motor Co. experienced a notable increase in new electric vehicle (EV) sales during the past quarter, providing a boost to the industry despite ongoing uncertainty due to shifting trade policies under former President Donald Trump.

Shoppers took advantage of the $7,500 federal EV tax credit, which expired on September 30, leading to a 21% rise in pure battery-electric vehicle sales compared to the previous year. This surge pushed EVs to account for 10% of overall deliveries, according to estimates from Cox Automotive.

This momentum prompted Cox to revise its forecast for the seasonally adjusted annual rate of U.S. sales upward to 16.1 million vehicles, following a more modest revision in June to 15.7 million.

Automakers have been adjusting their strategies in response to policy changes, with many reducing EV production and shifting focus toward gas and hybrid models. This dynamic created a buyers’ market for EVs, as manufacturers rushed to sell down inventory. Additionally, interest-rate cuts helped some shoppers overlook affordability concerns.

“It’s last call at the bar, everyone is stepping up and ordering,” said Tyson Jominy, vice president of data and analytics for JD Power, which expects sales of about 16.1 million new vehicles this year. “If we weren’t having this experience in EVs right now, we might be asking, ‘Why are sales so sluggish on the combustion engine side?’ It’s perhaps masking a bit of weakness.”

Strong Performance Across Major Carmakers

General Motors reported an 8% rise in sales during the third quarter, driven by electric vehicle deliveries that doubled to over 66,000 units. The Chevrolet Equinox EV saw sales more than double to 25,000 units, while Cadillac volumes rose 25% due to strong EV performance. Without the incentive-driven EV sales, GM's growth would have been less impressive, with internal combustion vehicle sales rising only 3%.

Ford's U.S. deliveries increased by 8.2% in the quarter, fueled by strong sales of SUVs like the Bronco, which rose 41%, and the redesigned Expedition large SUV, up more than 47%. Ford's EV sales set a quarterly record of 30,612 vehicles, a 30% increase. The F-Series pickup trucks also saw a 4.7% rise in sales.

Hyundai's U.S. sales climbed 13% to a record 239,069 vehicles, with EV sales doubling from the previous year. The gains were particularly strong in September, when EV sales jumped 153% compared to the same month in 2024.

Toyota Motor Corp. saw a 16% increase in sales to 629,137 vehicles, led by its best-selling RAV4 compact SUV and Camry sedan. The automaker sold out its inventory of the Toyota BZ4X and Lexus RZ electric vehicles by last month.

Honda Motor Co. reported a 2% decline in sales during the quarter. With only two EV models, Honda received less of a boost from the expiration of federal incentives. Sales of its Honda Prologue electric SUV rose 21% in September, but this gain of about 800 units was not enough to offset declines in top sellers like the CR-V and Accord.

Stellantis NV's deliveries increased by 6% in the third quarter, powered by an 11% jump in Jeep deliveries. However, the Jeep brand remains flat for the year, while Ram brand sales declined by 5% for the period. Light-duty pickups saw a 10% increase with the return of the popular Hemi engine.

Nissan Motor Co. reported a 5.3% rise in U.S. sales, led by SUVs and trucks.

Regulatory Changes and Market Uncertainty

The rollback of regulations and federal incentives has created uncertainty for the EV market. Trump campaigned on rolling back many of Biden's EV-friendly policies, including environmental regulations and the federal tax credit. Congress passed a major tax-and-spending bill in July, marking 2026 as the first year in nearly 15 years without subsidies for new EV purchases.

Most industry observers predict a slowdown in EV sales in the coming quarters, as the absence of federal incentives makes EVs more expensive than gas-powered cars. Average transaction prices for EVs rose in August to about $9,000 more than conventional models.

Ford CEO Jim Farley warned that EV sales in the U.S. could drop to 5% in the coming months. Some EV proponents had hoped states like California would step in to replace the expiring federal tax credits, but Governor Gavin Newsom announced that California will not replace the $7,500 federal EV tax credit.

Some carmakers are filling the gap. Hyundai announced it would extend $7,500 cash incentives for 2025 models of its Ioniq 5 EV and lower prices on certain 2026 versions. GM, Ford, and Stellantis also preserved the incentive discount on existing EV inventory.

Consumer Behavior and Future Outlook

Many consumers are rushing to purchase EVs before the tax credit expires. Chevy and Ford dealers' websites feature countdown clocks tracking the deadline. Rob Miles, a banker from Denver, said he finally bought the electric Mustang Mach-e in July due to the federal incentive and Ford's rebates.

Beyond the incentive grab, there is a sense of urgency among some shoppers that prices will rise on 2026 models as automakers look to recoup costs from new tariffs. Cox estimates that the U.S. government will collect roughly $100 billion in tariffs on imported autos, parts, and materials this year, potentially adding $5,500 to the cost of an imported vehicle and $1,000 to U.S.-assembled vehicles with imported components.

Automakers are absorbing some of these costs while spreading others across their lineups. However, new 2026 models are already showing markups, causing concern among dealers.

Uncertainty around tariff costs is expected to spike again as the Trump administration renegotiates trade agreements with Mexico and Canada. Manufacturers may respond by stripping features or revising trim levels to manage costs.

Despite the challenges, positive economic drivers remain. Interest-rate cuts and deregulation provide companies with flexibility, while a strong stock market boosts consumer confidence. Edmunds.com reports that more consumers are returning to the market with aging trade-ins, indicating pent-up demand.

“We’re seeing more consumers return to the market with aging trade-ins, which is a strong signal that there’s still real pent-up demand,” said Jessica Caldwell, head of insights for Edmunds.