The EV market is undergoing a major recalibration, with October sales plunging and lease volume slipping at the same time.
The details: Car buyers pulled back hard after EV sales surged in September ahead of the expiration of the $7,500 federal tax incentive — with Ford, Toyota, and Kia/Hyundai all posting steep declines, per CNBC.
Ford $F ( ▼ 1.54% ), which ranked third in U.S. EV sales through Q3, reported a 25% year-over-year drop in all-electric October sales.
Toyota sold just 18 units of its lone all-electric model, the BZ, in October—down from 1,401 units a year earlier and 61 units in September.
Top Kia and Hyundai EV models fell between 52% and 71% year-over-year, with Hyundai’s Ioniq 5 and Ioniq 9 plunging 80% and 71% month-to-month, respectively.
What they’re saying: “While the expiration of the federal tax credit impacted EV sales in the month of October, we still saw strong demand leading up to that change, and we remain confident that the market is going to reset,” Hyundai Motor North America CEO Randy Parker told CNBC.
Why it matters: For dealers, a sharp incentive-driven pullback means slower EV turns, more floorplan interest expense, and more pressure to discount to move inventory, all while rates stay elevated. It also forces stores to re-evaluate how much EV allocation they want, how much capital they lock up in charging/training, and whether they should lean harder into hybrids that are turning faster and require less consumer education to close.
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Between the lines: EV leasing, which has been the anchor of market growth because of the federal tax credit, also eased in October as average EV transaction prices moved higher, reports Edmunds.
Leases made up roughly 60% of financed EV purchases in October 2025 vs. 71% in September.
Average transaction prices (ATPs) for new EV purchases climbed to $65,021 in October, up from $60,167 in September.
What they’re saying: “The uptick suggests that October buyers were less motivated by short-term deals and more confident in paying for the technology, performance and long-term value EVs offer,” noted Edmunds in their report.
Bottom line: October’s plunge doesn’t necessarily mean demand has evaporated—it shows how subsidy-sensitive a big chunk of the EV market still is. If this reset is brief, automakers and dealers can chalk it up to the fallout of an incentive cliff. However, if it drags, it exposes that EV adoption is still fragile for the foreseeable future without policy support.
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