US electric vehicle (EV) sales are declining, while Europe’s market continues to expand, highlighting the impact of government policy, vehicle affordability and consumer preferences on automotive demand.
According to Motor Intelligence, US EV sales fell 30.7% in the first nine months of 2026 compared with the same period last year, representing just 6% of total vehicle sales, down from 8.5%.
The decline follows the expiration of a $7,500 federal tax credit a year earlier, which had encouraged consumers to bring forward purchases.
Europe, by contrast, recorded stronger growth. EVs accounted for 23.2% of vehicle sales through September, compared with 17.7% a year earlier.
Stricter emissions regulations, rising fuel prices and a growing selection of affordable models have supported demand. More than 150 EV models were available in Europe during the first half of 2026, many priced below €25,000.
In the US, the withdrawal of government incentives, relaxed fuel-efficiency regulations and restrictions on Chinese vehicle manufacturers have weakened market momentum. Several automakers have cancelled planned EV launches or reduced their electric vehicle offerings.
Consumers are increasingly favouring hybrid vehicles, whose sales rose 23% during the first three quarters, reaching 15.6% of total US vehicle sales. Used EV sales also increased 19%, indicating continued interest in electrification among price-conscious buyers.
Performance varies across manufacturers. Ford’s EV sales declined 68%, while General Motors recorded a 43% drop. Tesla experienced a smaller 14% decline, and Rivian’s sales increased 29%. Honda plans to end EV production after 2026 while expanding its hybrid portfolio, whereas Hyundai remains committed to electric vehicles.
US automakers face mounting pressure to balance affordability, profitability and long-term electrification strategies. Europe’s stronger policy support and broader product availability position it for continued EV growth, while US demand may remain uneven without renewed incentives and more competitive pricing.
