One year ago today, the auto industry bid farewell to a hefty federal tax credit that helped bring down the cost of electric vehicles.
asserted
that → bid → vehicles
Congress had voted to kill it as part of 2025's One Big Beautiful Bill Act — and car buyers rushed to take advantage of the credit before it ended on September 30, 2025.
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it → vote → September
So, how have EV sales fared since?
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sales → fare → ?
Ask around, and you get two answers.
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you → ask → answers
One is that EV sales are down, according to data from car analytics companies like Cox Automotive and Edmunds.
uncertain
sales → accord → Automotive
When the Inflation Reduction Act took effect in August 2022, expanding the credit to more buyers, EVs made up about 5% of new car sales.
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EVs → take → sales
Over the following three years, EV sales grew, ticking past 6, then 7, then 8%.
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sales → follow → %
They swelled to 11.4% in September 2025, as people rushed to take advantage of the tax credit's final days, according to data from Edmunds.
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people → swell → Edmunds
Data from Cox Automotive shows a similar bounce.
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Data → show → bounce
EV sales peaked around September — then dropped in the following two quarters once the credit expired.
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credit → peak → quarters
Compared to the year before, in late 2025, they fell 36%.
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they → compare → 2025
EVs have steadily accounted for somewhere between 5 and 6% of all new car sales throughout 2026, according to Edmunds.
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EVs → account → Edmunds
Cox Automotive reports similar figures.
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Automotive → report → figures
This trajectory is " clearly nothing like what it was previously, but it has not fallen off of a cliff, which is what some people's predictions would've been," said Ivan Drury, director of insights at Edmunds.
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Drury → fall → Edmunds
But ask Sal Iqbal how EV sales have fared over the last year, and you'll get another answer — and this one is more surprising.
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one → ask → answer
He's the general sales manager of the Toyota franchise in Massapequa, New York, where he's worked for nearly 10 years.
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he → work → years
And this year he noticed: Hybrid sales are way up.
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sales → notice → ?
"We used to have Siennas sit on the lot before," Iqbal said, referring to the Toyota model which, like other hybrids, uses a gas engine and battery-powered electric motor.
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which → use → engine
We used to have to literally beg people to take a Sienna, and now we can't keep them on the shelf.
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we → use → shelf
People are lining up for Siennas."
Drury concurs: Siennas are a whole thing.
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Siennas → line → Siennas
Years ago, he said, minivans like these were considered undesirable, "and now it's like, 'Oh, if I could get my hands on a sweet Sienna, I'd do anything.'"
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I → say → anything
The same thing, he said, is happening with Toyota's RAV4, a small hybrid SUV.
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he → say → RAV4
And nationally, American car buyers are really gravitating towards hybrids.
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buyers → gravitate → hybrids
Sales are up almost 27% in the past year, according to data from Edmunds.
uncertain
Sales → accord → Edmunds
Is it because the federal EV tax credit went away?
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credit → go → ?
Is it because gasoline prices are still hovering around $4.50 per gallon nationally?
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prices → hover → gallon
Data from Edmunds shows hybrid sales jumped up in March, shortly after the U.S. began its war in Iran — a geopolitical shift that was not on analysts' radars when they made their forecasts for 2026.
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they → show → 2026
" Hybrids are having their moment, are continuing to have their moment," said Stephanie Valdez Streaty, director of industry insights at Cox Automotive and who studies the transition to EVs.
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who → have → EVs
Drury put it this way: " The downfall of the EV has highlighted how good the hybrid is.
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hybrid → put → EV
How the federal tax credit worked
The EV tax credit was created by Congress in 2008, but it received a big boost from 2022's Inflation Reduction Act, which restructured how the credit could be used and adjusted some of the rules for which cars could qualify.
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cars → work → which
It also added a credit for purchasing used cars, an expansion designed to extend benefits to low-and-middle-income buyers.
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It → add → buyers
In the credits' most recent form, people who bought or leased a new electric vehicle could earn a federal tax credit worth up to $7,500, which could be stacked on top of state incentives.
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which → buy → incentives
The credit for used vehicles was up to $4,000 on qualifying vehicles.
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credit → use → vehicles
For people buying new cars to qualify, they needed to purchase EVs that were made in, and contained a certain percentage of parts from, North America.
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that → buy → America
That was a good deal, but it was an even better deal for people leasing EVs.
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it → lease → EVs
They could use that credit toward any EV car — without limits on price, where the vehicle was made, or their income.
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vehicle → use → price
"The program was so good, it almost made no sense to buy the car," Iqbal said.
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Iqbal → make → car
Either way, the credit helped juice interest in EVs, and overcome some of the reservations drivers have about them.
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drivers → juice → them
EVs generally have a higher sticker price than gas-powered cars; the average EV transaction price was over $54,000 in August, compared to an average of just under $50,000 for gas-powered vehicles, according to Cox Automotive.
uncertain
price → have → Automotive
Drivers have long worried about limited range, or a lack of charging points, or the expense of replacing an enormous lithium-ion battery that can cost thousands of dollars.
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that → worry → dollars
…and 64 more, not listed.
The Aporia
