US EV Registrations See First Decline in a Decade Since 2016

Electric vehicle (EV) registrations in the US experienced a decline in 2025, marking the first decrease in a decade since 2016, according to data from S&P Global. This halt in the previously consistent growth trajectory is attributed to several factors.

US Electric Vehicle (EV) registrations declined in 2025, marking the first decrease in a decade since 2016.

Contributing Factors to the Decline

• Expiration of Federal Tax Incentives: The discontinuation of federal EV incentives, including the $7,500 tax credit, impacted sales. An initial rush to purchase EVs in the third quarter of the previous year to secure these incentives was followed by a 48 percent plunge in registrations in December.

• Higher Costs: Despite various discounts and tax breaks, electric vehicles generally remain more expensive than their gasoline-powered equivalents.

• Range Anxiety and Charging Infrastructure: Concerns regarding EV range and the perceived slower and more difficult charging process compared to refueling gasoline cars continue to be a factor for some consumers, despite improvements in range, charging points, and charging times.

• Faster Depreciation: Electric cars tend to depreciate at a faster rate than comparable gasoline vehicles. This rapid loss of value is partly linked to the software-driven nature of EVs, as software can quickly become outdated. This trend is observed across various EV models, including high-end options like the Porsche Taycan.