American drivers purchased a record number of EVs in January, but will that momentum last?
Ford, Honda, Hyundai, Kia, and Lucid all reported significant sales growth last month, Electrek reports. January’s strong performance follows a record-setting December, where EVs hit 8.8% of new vehicle registrations for the first time.
That’s still a small number compared to Europe (23%) and China (50%), but the US EV industry has been on edge in recent months as it awaits the impact of Trump’s second administration. The president has already moved swiftly to freeze funds for a nationwide charging network and revoke new EPA emissions targets that incentivized carmakers to develop electrified vehicles.
The one big thing he’s left untouched is the $7,500 federal tax credit. In a Jan. 20 executive order, Trump said he’s “considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs.” But two weeks later, it’s still intact.
The Alliance for Automotive Innovation—whose members include Ford and GM—are encouraging him to leave it alone. The tax credit has “fueled investment in domestic EV and battery manufacturing and increased good-paying jobs in automotive communities across the industrial base,” the alliance said in November. “The incentives help ensure the US continues to lead in manufacturing critical to our national and economic security.”
The January sales rush could include buyers looking to secure the credit before it’s gone. But that’s not the full story because several top-selling models do not qualify for it, including the Ford Mustang Mach-E (3,529 sold) and Hyundai Ioniq 5 (2,250), which lost its short-lived eligibility on Jan. 21. The top-selling Honda Prologue (3,744) qualifies for the credit.
More likely, as we’ve pointed out, EVs are likely selling because they are simply great cars for many buyers. Any political pushback is likely to delay or slow their adoption, not stop it entirely.
The story of the US EV market is still unfolding for 2025, especially since not all carmakers have reported January numbers. Major players like GM and Tesla only disclose quarterly sales, so we’ll have to wait for that. Last we heard from GM, its EV sales shot up 50% year-over-year in Q4 and 125% for the full year, doubling its market share, according to Yahoo! Finance.
But Tesla has hit some trouble lately, which could signal a slowdown EV in adoption since Tesla is still the dominant market player. Sales were slightly down for the full year in 2024, and only up a modest 2% in Q4. That could be because buyers are bored with Tesla’s aging lineup and opting for newer launches from other brands. Tesla has not revealed plans to debut any new EVs in 2025 that could jumpstart sales, save for a slightly redesigned Model Y expected in March. The relatively niche Cybertruck was its last major launch.
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Tesla is also stumbling in Europe. Although EV sales are down in Europe in general, Tesla is underperforming. Its vehicle registrations fell 13% across the EU last year, according to BNN Bloomberg, compared to a decline of 5.4% for all EV brands, according to the European Automobile Manufacturers’ Association.
Musk’s politics may be playing a bigger role in the European market, especially in Germany, where sales plummeted 41%. Musk has publicly backed the far-right Alternative for Germany (AfD) party, while performing a Nazi-like salute at a Trump inauguration event may not be helping sales in a country where that gesture is banned. However, Tesla registrations also dropped precipitously in other European countries, Electrek reports.
We’ll have to wait until Tesla’s Q1 results in the spring to see if its CEO’s polarizing persona has similar effects on the US market.
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About Emily Forlini
Senior Reporter
