The U.S. Energy Information Administration reported recently that almost a quarter of passenger vehicles sold in the U.S. in 2025 were hybrid, battery electric, or plug-in hybrid vehicles. However, electric vehicle sales crashed after the expiration of a substantial tax credit in September—suggesting that EVs aren’t competitive on their own merits without subsidies.
In 2025, 22% of light-duty vehicles sold in the U.S. were hybrid, battery electric, or plug-in hybrid vehicles. However, hybrid electric vehicles that do not have plugs gained market share while electric vehicles and plug-in hybrids declined. This is in large part because the One Big Beautiful Bill Act (OBBBA) repealed the Clean Vehicle Tax Credit, which provided consumers with $7,500 for purchasing a new EV.
EVs reached a record 12 percent market share in September 2025, the final month before tax credits expired. Then came the crash: In each remaining month of 2025, EV sales plummeted to less than 6 percent of the market, or a 50 percent decline. For the first time since EVs entered the mainstream market, both annual sales and market share actually decreased year-over-year.
When consumers must pay the full, unsubsidized price for an EV, they voted with their wallets for hybrid technology instead—which were never eligible for tax credits in the first place. EVs would cost a staggering $50,000 more to own over 10 years than internal-combustion vehicles if not for subsidies, mandates, and regulations. In contrast, hybrid growth represents a genuine market demand without requiring the infrastructure challenges and price premiums of pure electric vehicles. Even affluent consumers pulled back buying EVs dramatically when subsidies ended; the EIA notes that the expiration of tax credits affected luxury and non-luxury EV sales in similar ways.
EVs are falling out of favor with automakers as well. Late last year, Ford Motor Company scrapped the F-150 Lightning, which cost the company almost $20 billion and drove the company to its worst financial performance since 2008. In early 2024, Ford was losing over $100,000 for each EV sold and never turned a profit on a single F-150 Lightning.
Consumers should be free to purchase the vehicles that best fit their circumstances. When they vote with their wallets, hybrids and traditional internal combustion vehicles win the day. While the federal government with OBBBA has stepped back from subsidizing EVs, California and 10 other states still hope to ban internal combustion engine sales by 2035. This timeline is likely to be badly misaligned with consumer preferences and technological readiness.