In late 2023, analysts began warning EV sales were not increasing as fast as once projected as concerns about cost, range, and charger availability persisted. Some even forecast sales would decline in 2024. Major automakers began walking back their 100% electric commitments. Ultimately, new EV sales rose by just 7% last year — enough to push the sector to an annual record-high of 1.3 million vehicles sold, but far slower growth than the 49% surge in 2023.
After Republicans swept the November elections, the market’s outlook grew even gloomier. That’s because federal policies supporting EV adoption are likely to disappear or at least be severely watered down.
President Donald Trump’s Environmental Protection Agency has already moved to kill the strict tailpipe emissions rules supported by legacy U.S. automakers. Congressional Republicans are on a (potentially doomed) crusade to revoke waivers that have allowed states like California and New York to ban the sale of new gas vehicles after 2035. They’re also reportedly looking to gut the consumer EV tax credit, an action that would hobble EV sales. Trump’s tariffs, such as they are, present yet another hurdle: The U.S. relies heavily on China for key battery components and minerals.
But at least in Q1, EV sales were still ticking up. And that’s despite Tesla’s big decline. The U.S. market leader saw its sales drop by 9% year-over-year, the result of a stagnant product lineup and, according to some analysts, public distaste for CEO Elon Musk’s political persona. Meanwhile, General Motors, Ford, Hyundai, and BMW all saw their sales continue to rise.
The fact that the industry managed to grow despite the struggles of its overwhelming leader — Tesla accounted for 44% of the market in Q1 — speaks to the increasing vibrancy and resilience of the U.S. EV market. The question now is whether it is vibrant and resilient enough to keep growing despite federal policy headwinds.
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