Electric vehicle (EV) sales in the United States climbed to an all-time high of 438,487 units in the third quarter of 2025, according to data from Kelley Blue Book. The surge came as consumers rushed to take advantage of the federal EV tax credit, which expired on September 30, marking what analysts described as a one-off boost ahead of an uncertain final quarter.
EV sales rose 40.7% from the previous quarter and 29.6% year-on-year, surpassing the previous record from Q4 2024 by nearly 20%. Electric models accounted for 10.5% of all new vehicles sold in the U.S. during the period — the highest quarterly share on record.
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“Clearly, the urgency of an incentive-ending deadline got people and dealers moving,” Cox Automotive, the parent company of Kelley Blue Book, said in a statement. Analysts, however, cautioned that the surge is unlikely to sustain into Q4, as the market adjusts to the loss of the federal subsidy that offered buyers up to $7,500 per vehicle.
Uneven Gains Across Automakers
Cox Automotive said not all manufacturers benefited equally from the pre-deadline demand. General Motors and Volkswagen more than doubled their EV sales compared to the same quarter last year, while Tesla recorded an 8% year-on-year increase, marking its first quarterly U.S. growth of 2025. Hyundai, Porsche, and Volvo also posted notable gains.
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In contrast, Toyota and Nissan saw steep declines as both Japanese automakers scaled back their U.S. EV plans amid uncertainty over incentives. Toyota’s EV sales fell 26.6%, and Nissan’s dropped 60.9% year-on-year. BMW posted a 16.4% decline, while Mercedes-Benz saw only a marginal 3% rise.
“The training wheels are coming off,” said Stephanie Valdez Streaty, Director of Industry Insights at Cox Automotive. “The federal tax credit was a key catalyst for EV adoption, and its expiration marks a pivotal moment. This shift will test whether the electric vehicle market is mature enough to thrive on its own fundamentals or still needs support to expand further.”
Tesla’s Share Declines Despite Growth
Despite recording its first domestic growth this year, Tesla’s overall market share fell from 49% to 41% compared to Q3 2024, according to Kelley Blue Book estimates. The company’s Model Y and Model 3 continued to dominate, with 114,000 and 53,000 units sold respectively, maintaining their lead as the two best-selling EVs in the country.
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“Recently announced price cuts may help Mr. Musk’s company maintain volume,” Cox analysts said. “But the challenges are only getting tougher for Tesla, which essentially has a two-vehicle lineup supported by three niche vehicles.”
Behind Tesla’s models, General Motors’ Chevy Equinox EV ranked third with nearly 25,000 units sold in the quarter. However, Cox Automotive noted that only nine of the 90 EV models available in the U.S. achieved more than 10,000 sales in Q3, underscoring the limited reach of most electric offerings.
While Q3 marked a milestone for the U.S. EV market, analysts expect a slowdown in Q4 as the effects of the expiring subsidy take hold. “This was a sprint to the finish,” said Cox Automotive. “What comes next will show how resilient EV demand truly is without federal incentives.”
