US EV Sales Drop After Incentives Discontinued: Europe Sales Grow for Several Reasons: US Hybrid and Used EV Sales Rose

       Right before the tax credits for new and used EVs expired on September 30, 2025, in the U.S., the share of EVs bought briefly climbed to 8.5% of all vehicles. So far in 2026, that share has dropped to about 6%, about 1 in 16.5 vehicles. Meanwhile, EV sales in Europe continue to grow for several reasons. Reason #1 is that there are many more models available in Europe, including compact models that I would call optimized for city driving.

     Reason # 2 is that more lower-cost models are available in Europe, with some under US $28,000. This has been aided by competition from Chinese models. Reason #3 is that the cost of gasoline and diesel, though currently high in the U.S., has remained much higher in  Europe than in the U.S. That is a big incentive. Diesel has averaged over $9 per gallon in the EU for a few years now. Options are limited in the U.S. for compact, inexpensive EVs. Reason #4 is that several European countries continue to offer tax breaks for EVs.

2026 EV Sales: US vs. Europe

     Chinese EVs are not likely to be sold in the U.S. anytime soon, so that knocks off more options for Americans. Some have argued that cheap Chinese models are of lower quality and that could be the case.

     Auto Evolution notes that in contrast, Americans have discovered the value of hybrids and responded. They have also been buying more used EVs, taking advantage of depreciation but also risking battery degradation:

“US hybrid sales rose a whopping 23 percent through the first three quarters of 2026, accounting for 15.6 percent of the overall market.”

“Promising better fuel economy than a conventional gas car without the need to plan around charging stops is the secret here. Used electric vehicles are finding buyers as well, with sales of used electric vehicles climbing 19 percent through September 2026. Reuters also notes that depreciation can make EVs particularly attractive, though battery health is a big problem for second-hand models.”

     They also note that so far this year Tesla sales dropped by 14% but Rivian sales rose by 29%. Ford EVs dropped by 68%, and General Motors EVs dropped by 43%, taking the biggest hits.

“Simply put, the used market offers the best clue that America's appetite for electric vehicles is still there. With used sales up 19 percent, it becomes clear that American drivers are willing to go electric as long as the price makes sense.”

 

   

 

References:

 

US EV share slid to 6% after tax credits ended, while Europe hit a record 23% with cheaper models. Shannon Germaine. The Cool Down. October 19, 2026. US EV share slid to 6% after tax credits ended, while Europe hit a record 23% with cheaper models

US EV Sales Sit at 6% While Europe Hits Record 23%: Back in September 2026, electric vehicles took nearly a quarter of Europe's new car market as opposed to a rather disappointing 6% in the United States. Mircea Panai. October 14, 2026. Auto Evolution. US EV Sales Sit at 6% While Europe Hits Record 23% - autoevolution