One year ago this week, the federal government stopped paying Americans $7,500 to buy an electric car. Congress ended the credit as part of the 2025 tax and spending law, and it expired on September 30, 2025. Buyers saw it coming. In September 2025, electric vehicles hit a record 11.4 percent of new car sales, according to Edmunds data cited by NPR. Then the subsidy disappeared, and so did half the market.
A year later, the numbers have settled enough to answer the question everyone was asking: what happens to EVs without the federal subsidy? The answer is more useful than either side of the political argument predicted.
EVs fell back to where they started
Through 2026, electric vehicles have held at roughly 5 to 6 percent of new car sales, according to Edmunds. Cox Automotive put the second-quarter share at 5.8 percent, with 247,226 EVs sold, down 20.5 percent from a year earlier. That was the third straight quarter of year-over-year decline, though a smaller drop than the 27.3 percent fall in the first quarter. Cox said the market may be stabilizing.
The most telling comparison is not with last year. It is with 2022. Before Congress expanded the credit that August, EVs were about 5 percent of new car sales, NPR reported. Three years of expanded incentives later, the share is roughly back where it began. That suggests the credit did not create lasting demand so much as pull forward purchases from buyers who were already close to buying.
But the floor held. Edmunds’ Ivan Drury told NPR the market is nothing like it was, but it has not fallen off a cliff. Roughly one in 17 new car buyers is still choosing a fully electric vehicle with no federal help at all. Those are the buyers EVs have won on the merits.
The buyers didn’t go back to gas. They went to hybrids.
Here is the part of the story that gets lost in the EV-versus-gas framing. According to the Energy Information Administration, hybrids made up 16 percent of new light-duty vehicles sold in the second quarter of 2026, using data from Omdia, while battery electric vehicles were 6 percent and plug-in hybrids 1.4 percent. Edmunds data cited by NPR shows hybrid sales up 27 percent from a year earlier. Hybrids now outsell pure EVs by more than two to one.
The EIA flagged the shift on X:
Hybrid vehicle sales rise while battery electric sales remain lower after tax credits expired in 2025. #TodayInEnergy https://t.co/HX4qVsz9nN pic.twitter.com/xgxOeOfLVS
— EIA (@EIAgov) July 28, 2026
This is not only a Toyota story anymore, though Toyota still leads. NPR reported that Hyundai’s hybrid sales rose 33 percent and Kia’s 99 percent in August from a year earlier. American buyers are still moving away from gasoline. They are just doing it in smaller steps, choosing a car that improves fuel economy without asking them to change how they refuel.
That is a meaningful shift in how to read the market. If the question is whether Americans are electrifying their cars, the answer is yes, with hybrids at a record share. If the question is whether they are going fully electric, the answer, without a subsidy, is: slowly.
The case that the EV future is just delayed
Supporters of EVs have a strong argument that this is a pause, not a verdict. Cox Automotive’s Stephanie Valdez Streaty told NPR that the future is still electric. Price is less of a barrier than it was: Cox data cited by NPR puts the average EV transaction price at a little over $54,000, against roughly $50,000 for a gas vehicle. That roughly $4,000 gap is already smaller than the $7,500 credit was.
The bigger force may be the used market. More than 300,000 EVs are expected to come off lease over the next year, NPR reported. Used EVs are still under 3 percent of the used market, but Nick Nigro of Atlas Public Policy called them the single best advertisement for electric vehicles. Cheap, lightly used EVs could reach exactly the buyers that $54,000 new ones cannot.
Opponents of the credit have their own reading of the same data: if EV share returned to its pre-subsidy level once the money stopped, taxpayers were mostly paying to move purchases forward, and the market is now finding its natural level.
What the year actually proved
Both readings have evidence behind them, but one conclusion holds regardless of where you stand. The $7,500 credit could lift EV sales, but it could not hold them up. The floor was always somewhere around 5 percent, and the buyers above that floor were mostly buying on price. The next phase will be decided by the same thing: whether a new or used EV can beat a hybrid on total cost without help from Washington. For now, the hybrid is winning that comparison, and buyers are voting accordingly.
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