U.S. electric vehicle (EV) sales surged to an all-time high in the third quarter of 2025, reaching 438,487 units sold — up 40.7% from Q2 and nearly 30% year over year, according to Kelley Blue Book. EVs captured a record 10.5% of total vehicle sales, up from 8.6% a year earlier. The strong performance was largely driven by the end of federal EV incentives, which spurred consumers and dealers to act quickly. While brands like Volkswagen, General Motors, Honda, and Hyundai posted significant gains, others — including Mercedes-Benz, Toyota, and Nissan — saw stagnant or declining sales. Tesla recorded an 8% year-over-year increase, its first of 2025, but its market share fell to 41% from 49% as competition intensified.

Despite the record-setting quarter, industry experts warn of headwinds ahead. With federal tax credits now expired, Cox Automotive forecasts a slowdown in EV sales in Q4 2025 and early 2026 as automakers reassess production and pricing strategies. Tesla’s limited lineup and broader market profitability challenges underscore ongoing hurdles, as only a handful of models — notably the Tesla Model Y, Model 3, and Chevy Equinox EV — achieved strong volumes. Cox’s Stephanie Valdez Streaty described the moment as a pivotal test for the EV market, suggesting that while short-term growth may slow, long-term trends still point toward electrification driven by innovation in battery technology, improved transparency, and expanding infrastructure.