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EV Tax Credit Cut: Who Won, Who Lost?
13 Oct
Summary
- EV sales have dropped significantly since the $7,500 federal tax credit elimination.
- Automakers strong in hybrids, like Toyota and Hyundai, saw increased interest.
- Detroit automakers like GM and Ford face challenges after heavy EV investment.
Since the elimination of the $7,500 federal EV tax credit on September 30, 2025, the automotive industry has seen a notable shift. Electric vehicle sales have plummeted, with only about 6% of new car sales in 2026 being electric, down from nearly 10% in 2025. However, a recent spike in gas prices has led to increased interest in hybrid vehicles.
Carmakers with strong hybrid offerings, including Toyota and Hyundai, have emerged as winners. Toyota faced criticism for its focus on hybrids but is now benefiting as consumers seek fuel efficiency amid rising gas prices. Hyundai also capitalized with a diverse lineup of both hybrids and EVs.
Conversely, Detroit automakers like General Motors and Ford, which had heavily invested in an all-electric future, are experiencing challenges. GM's EV sales fell from over 78,000 in the first half of 2025 to under 57,000 in the first half of 2026. Ford is transitioning some of its electric models, like the F-150 Lightning, to hybrid Extended Range Electric Vehicle (EREV) versions.
Volkswagen is also facing difficulties, ending production of its U.S.-built ID.4 electric crossover, its most popular domestic EV. The company plans successor models but currently offers only the ID. Buzz minivan as its sole domestic electric vehicle.
