- U.S. EV registrations collapsed by 41% in January.
- As a result, electric cars now have a 5.1% market share, down from 8.3% in January of last year.
- EV registrations have fallen year over year in every month since the $7,500 federal tax credit went away on Sept. 30.
American car buyers–and car manufacturers–are getting to grips with a new and unforgiving reality. In January, electric car registrations in the United States fell by a whopping 41% compared to the same period last year, marking yet another month of decline since the $7,500 federal tax credit was canceled on September 30, 2025.
The vast majority of car brands saw registrations go down in the first month of this year, according to data from S&P Global Mobility quoted by Automotive News. Registration numbers are used as a proxy for sales because some car companies, like Tesla, don’t separate U.S. deliveries from their global numbers, nor do they report monthly figures.
Lucid was among the few automakers that saw a solid increase in registrations in January.
Photo by: Patrick George
In total, 59,802 EVs were registered in the U.S. in January, in a market where just under 1.2 million new cars were registered. The share of electric vehicles fell to 5.1% from 8.3% in January of last year, while gas cars increased their market share by 2.3 percentage points to reach 76.6%. Hybrids climbed 1 percentage point to 14.7%.
It’s a vicious cycle. Buyers can no longer rely on the federal tax credit to get a better price on a new EV, which slims down the customer pool for dealers. Meanwhile, car manufacturers no longer have to pay penalties if they don’t sell enough EVs, so there’s no incentive for them to push new models.
In fact, after the $7,500 incentive went away on September 30, 2025, several automakers have canceled or discontinued some of their electric models. The Ford F-150 Lightning was put to rest, despite being America’s best-selling electric pickup. Tesla will discontinue the slow-selling Model S and Model X in the second quarter, while Honda and Ram have canceled their upcoming flagship EVs before they even hit the dealership floor, killing billions of dollars of investments in the process.
However, in all the red that represents the registration numbers for EVs in January, a few bright green spots can be seen. Cadillac, America’s second-best-selling EV maker, climbed 8.1%. Toyota did even better, with a 25% increase, while Lucid almost doubled its registrations with a 97% jump compared to the same month last year.
Lexus also fared very well, percentage-wise, with a 166% increase, as did Maserati, which recorded a 140% spike. That said, despite the glowing upticks, the Japanese luxury brand only sold 810 EVs in January, while Maserati found 12 new customers for its electric cars.
In contrast, Tesla, the biggest EV player in America, sold 32,123 cars, down 26% year-over-year.
“It’s what we expected,” said Tom Libby, an analyst at S&P Global Mobility. “It’s a reset, and it’s going to be a very slow process moving forward.”
While some car companies are retreating and reanalyzing their ambitious goals, others are charging forward with more models. Rivian is launching its long-awaited R2 mid-size SUV this spring, which will open up a new market segment for the California startup.
Lucid is also expanding into the more affordable mid-size category with the upcoming Cosmos and Earth crossovers, while traditional automakers are trying to compete, too. The new BMW iX3, Volvo EX60, and Mercedes-Benz GLC are promising lightning-fast charging speeds and long driving ranges–two features that have already drawn in a lot of customers in Europe.
Speaking of Europe, EV registrations surged in January, leaving the U.S. in the dust. Europeans bought nearly 190,000 EVs in this year’s first month alone, leading to a 13.9% increase year-over-year and boosting the market share from 14.9% to 19.3%
