Electric vehicle sales in the United States faced a setback in 2025, even as hybrid vehicles continued to gain popularity among consumers. Data estimates from Omdia show that around 22% of all light-duty vehicles sold during the year were either hybrid, battery electric, or plug-in hybrid vehicles. This marked an increase from 20% in 2024. However, the growth was driven mainly by hybrid electric vehicles, while sales of battery electric vehicles and plug-in hybrid vehicles declined over the year.
Hybrid electric vehicles continued to attract buyers because they do not rely on external charging and are seen as a practical option for consumers who want better fuel efficiency without changing driving habits. These vehicles do not use grid electricity and were not eligible for federal electric vehicle tax credits. In contrast, battery electric vehicles and plug-in hybrids depend on charging, mostly from the electricity grid, and their sales are more sensitive to policy support and incentives.
A major turning point for battery electric vehicle sales came in the second half of 2025. Sales increased briefly before dropping sharply after the expiration of federal tax credits at the end of September. Two key incentives, the New Clean Vehicle Credit and the Qualified Commercial Clean Vehicle Credit, expired on September 30, 2025. Just before the credits ended, battery electric vehicles reached a record market share of 12% of light-duty vehicle sales in September. In the months that followed, their share fell to below 6% for the rest of the year. This made 2025 the first year in which both annual sales and overall market share of battery electric vehicles declined.
Battery electric vehicles remain more common in the luxury vehicle segment. Luxury vehicles made up about 14% of the total light-duty vehicle market in 2025. Within this category, nearly 23% of vehicles sold were battery electric. The end of tax credits affected both luxury and non-luxury electric vehicle sales in a similar way, showing that incentives played a key role across market segments.
Despite recent sales trends, electric vehicles still make up a small portion of the total vehicles on the road. While electric vehicles accounted for around 9% of light-duty vehicle sales in 2025, their share of the overall vehicle fleet remains much lower. According to the latest available data from 2024, electric vehicles represented only about 2% of all registered light-duty vehicles in the United States. This highlights the slow pace at which new vehicle sales translate into changes in the total vehicle population.
