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Home»Automobile»Here’s why US EV sales may gain 3% in 2025 despite headwinds
Automobile

Here’s why US EV sales may gain 3% in 2025 despite headwinds

news@greencarreports.com (Bengt Halvorson)By news@greencarreports.com (Bengt Halvorson)February 18, 2025No Comments7 Mins Read
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Here's Why Us Ev Sales May Gain 3% In 2025
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  • U.S. EV market share may be flat vs. 2024, but market expansion means 3% EV sales growth
  • EV sales gained 58% looking past direct sales from Tesla, Rivian, Lucid, others
  • California EV sales were near flat for 2024, but non-Tesla EV sales gained 21%
  • Policy wildcards include EV tax credit, tariffs, emissions policy, and charging infrastructure

Are U.S. EV sales still on the best way up? 

The reply is yes, but there’s a fancy set of things at play, including the continued decline of Tesla sales, an increase in popularity of mainstream EV models, and all that’s potentially set to occur under a Trump administration. 

On the surface, it’s going to seem like the EV market is just treading water. The analysts on the market research firm J.D. Power last week revised their EV retail market share forecast to be flat this 12 months, with EVs at 9.1% of the U.S. retail market.

Behind that, J.D. Power cited a confluence of recent headwinds including vehicle-related tariffs, emissions policy softening, the potential removal of the EV tax credit, and the potential removal of federal charging-infrastructure funding (already within the obstructionism stage with a DOT freeze of funds). 

Looking ahead, it adjusted the complete trajectory for EV adoption in the approaching years downward versus where it had been, but still on a climb after this 12 months—to 26% of the market by 2030, with quite a big selection for variation. 

J.D. Power U.S. EV market share forecast – February 2025

An expanding market, more mass-market EVs

While there’s all that uncertainty on the surface, and won’t seem to be EVs are gaining traction, there’s quite a bit happening from underneath. As J.D. Power noted, there was a 58% rise in 2024 in what it called “franchise EV sales.” Not including direct-sales EV brands like Tesla, Rivian, Lucid, Polestar, and others, these sales at traditional dealerships amounted to 376,000 units throughout the 12 months. 

There’s also the fact that the tide is rising and the vehicle market as a complete is in expansion. In 2025, J.D. Power forecasts 16.3 million total sales—up 3% from 2024’s total of 15.8 million sales. And a flat market share of EVs signifies that they’ll gain by that very same percentage available in the market. 

“We expect a flat retail share for EVs,” said Tyson Jominy, J.D. Power’s VP of knowledge and analytics, to Green Automobile Reports. “With total sales expected to grow 3%, so will EV sales.”

EV sales by volume rose by about 7% in 2024, up from a complete share of about 8% of the market in 2023. 

2024 Chevrolet Equinox EV

2024 Chevrolet Equinox EV

EV sales growth nowhere near previous forecasts

So while growth continues to be happening for the EV market in 2025, it is much below what analysts had anticipated at first of 2024. Bloomberg analysts in January 2024 anticipated that EVs would reach a 13% U.S. market share in 2024, at 1.9 million vehicles, and the International Energy Agency, in April 2024, still anticipated that EVs would rise to 11% of the market in 2024. 

Further, pent-up demand for inexpensive models and the pending arrival of a few of them, just like the Chevrolet Equinox EV and Ford’s pivot to EV affordability, led some, including S&P Global Mobility, to point to more aggressive EV growth for future years versus previous forecasts. 

But that each one modified with November’s election, when U.S. voters made a robust statement against a Biden administration vision that had included a longer-lens green-energy focus, a modernization of the auto industry and provide chain around it, and incentives that rewarded U.S. manufacturing. 

And there could also be some surges and stumbles yet to the market in 2025, as policy changes. As an illustration, fourth-quarter 2024 EV sales were up—by greater than 15% 12 months over 12 months—as dealerships saw a run on purchases as a consequence of concern that the EV tax credit might soon be going away. 

2025 Tesla Model Y

2025 Tesla Model Y

The California factor—or Tesla factor, or Musk factor

It’s not possible to evaluate EV sales and never include a take a look at Tesla and its pronounced downward trend in sales. After a few years of gains, Tesla sales and deliveries fell in 2024—each internationally and throughout the U.S. 

And Tesla’s California sales downturn was a key piece of that. Take Tesla out of the totals, and the California data tells a wildly different story. In response to it, California sales of non-Tesla EVs rose 21% in 2024, versus 2023. So especially for California, 2024’s EV sales dip may need been a really Tesla-specific problem while EV shoppers flocked to other brands and models that weren’t 

In California, EV sales have amounted to about 30% of the sales total, in keeping with the California Recent Automobile Dealers Association, and greater than a 3rd of all EVs sold within the U.S. are sold within the Golden State. Lower than three years ago California comprised an eighth of Tesla’s global deliveries. 

While in 2022, Tesla cracked 10% of the market share in what was its home state, it’s now on a steep fall from favor—and considering how sharply sales of other EVs rose, it’s hard to point fingers to a sagging EV market. 

Tesla’s 2024 sales totals in California (based on registration data from Experian Automotive) dropped by 11.6% versus 2023, while its actual market share of the complete California light-vehicle market dropped from 13.0% in 2023 to 11.6% in 2024. The Toyota Camry edged out the Tesla Model 3 for the top-selling passenger automobile in California during 2023, while the Tesla Model Y held on to its spot because the top-selling light truck.

Does Tesla’s California burnout extend to other states? It appears so. Tesla sold 611,755 vehicles within the U.S. in 2024, down nearly 5% from the 2023 total of 642,504, in keeping with Automotive News, based on registrations. So despite an expansion of the EV market across the U.S., Tesla’s EV sales are in contraction elsewhere too, and it didn’t manage to supply sales gains. 

Tesla CEO Elon Musk at Cybercab event (screenshot) - Oct. 2024

Tesla CEO Elon Musk at Cybercab event (screenshot) – Oct. 2024

While there wasn’t significant EV sales growth in California in 2024, as J.D. Power pointed on the market was indeed latest growth within the EV sector coming from mass-market EV models, in addition to in Recent York, Florida, and Colorado, which have emerged as latest EV sales hotspots.

To tease out the takeaway from one other angle, Tesla isn’t making up for its California sunset in those latest states. Its California sales drop of nearly 27,000 lands below its national-total sales drop of 31,000. 

As several polls and market analyses concluded in 2024, Tesla CEO Elon Musk was getting in the best way of Tesla sales as he became overtly political after which a participant on the campaign trail—and now a “special government worker” in the chief branch and, some have called it, an unofficial member of President Trump’s cabinet.

Based on those trends, and the quantitative trends emerging from sales data in 2024, it’s hard to assume J.D. Power’s 3% EV market growth in 2025 happening through Tesla gains. 

As 2025 unfolds, it isn’t just Musk and his memes, however the policy he’s backing from the White House itself, that can affect how EV sales play out. 

This Article First Appeared At www.greencarreports.com

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