EV sales growth could come screeching to a halt in 2025, forecast shows

J.D. Power projects electric vehicle (EV) retail share will hold steady at 9.1% in 2025, marking the first time in years that growth won’t accelerate. 

But the problem isn’t necessarily demand—it’s the changing economics of EV ownership. As tax credits (likely) disappear, tariffs brew, and infrastructure gaps persist, automakers, dealers, and consumers all have decisions to make.

For context: Over the years, EV adoption has been driven by two primary forces—federal tax credits making EVs more affordable and an expanding lineup of mass-market models. But in 2025, both of these pillars are being tested:

• The Trump administration plans to eliminate the Clean Vehicle Tax Credit, which has played a key role in closing the price gap between EVs and gas-powered cars.

• This means—state rebates and tax breaks will become the deciding factor in many markets.

• New tariffs on imported EVs and even gas-powered cars could push prices higher, creating uncertainty for automakers deciding whether to absorb the cost, cut into margins, or pass it on to consumers.

• Even as more affordable EVs hit the market, charging infrastructure continues to lag, particularly in areas where EV adoption is just taking off.

Zooming in: The luxury segment dominated the early years of EV adoption, but that’s no longer the case. 

• In 2024, mainstream EV sales surged 58% to 376,000 units, thanks to models from Chevrolet, Ford, Honda, Hyundai, and Kia. 

• But unlike luxury EV buyers, who were early adopters willing to pay a premium, mass-market consumers are shopping based on price.

Why it matters: A loss of EV sales momentum could put automakers at risk for overproducing vehicles consumers won’t buy—leading to bloated inventories, price cuts, and shrinking margins. Dealers—caught in the middle—might struggle with slower turn rates and a tougher sales pitch, while consumers could see fewer EV options in the future as manufacturers shift focus back to hybrids and gas-powered cars.

Bottom line: 2025 is a stress test for the EV market. Electrified vehicles aren’t going away, but the easy growth is over. The decisions made this year—on pricing, policy, and infrastructure—will determine whether this slowdown is temporary or the start of a much longer plateau.

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