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It’s easy to assume that EVs are finally gaining traction in the US.

After all, purchases of battery-powered cars exceeded 1.2 million in the previous year, over five times the figure just a few years ago.

Hybrid sales have surged by a factor of three.

Electric vehicles accounted for 10% of overall sales in August—a new high, according to market research.

Additionally, reports to investors this week from major automakers and additional companies all reported record electric sales over the last quarter.

This represented a bright spot in an industry wrestling with the fallout from still high interest rates and consumers on edge over rising prices, tariffs, and the wider economy.

Experts Point to a Short-Term Boost

However market watchers explain the surge was driven by a rush to purchase before the end of a federal incentive that reduced as much as $7,500 off the cost of eligible battery electric, plug-in hybrid or fuel cell vehicles.

With that tax credit gone as of the close of last month, carmakers are expecting momentum to decline sharply.

"We expect a vibrant sector, but it's going to be more limited, way smaller than we thought," a top automaker executive said recently.

"We anticipate that electric vehicle interest is going to decline pretty precipitously," another official noted, saying it would take time to see how soon customers would return.

American Trails International Adoption

Despite the recent gains, the US, the world's second biggest car market, appeared as a slow adopter in electric car sales compared to many other nations.

In the UK, for instance, purchases of battery electric and hybrid cars accounted for almost one-third of new sales in the previous year, while in the European Union, they accounted for about 20% of sales.

In China, the largest auto market worldwide, adoption of these vehicles made up almost half of total sales last year, and they are projected to exceed half this year.

Take-up in nations like Norway and Nepal is higher still.

Electric vehicles tend to account for a smaller share of sales in developing regions and other parts of Asia—but expansion there has been surging.

Government Differences

Observers note uptake in the United States has been hindered by comparatively weak federal backing for the industry, which has limited the kinds of incentives, exchange schemes, and rules that have helped the industry in nations such as China, the UK and Europe.

The previous administration made efforts to boost adoption, targeting for EVs to account for 50% of total purchases in the United States by 2030.

Officials at the time tightened standards on emissions, boosted demand through purchases for government fleets, nudged carmakers to put money with financial support for electric vehicle projects, spent billions building charging stations, and expanded the $7,500 tax credit as a inducement for consumers.

Advocates framed these actions in part as a strategic necessity, warning that absent such measures American manufacturers would face disadvantages to rivals from abroad.

However, recent leadership has pushed to eliminate many of those measures, including the $7,500 credit, claiming that they were pushing people to purchase cars they would not otherwise want.

"Our position is ... you're not going to be forced to make all of those cars," a leader said this summer, while signing a bill aimed at striking down rules that would have eliminated sales of gasoline vehicles in one state by 2035. "You can make them, but it'll be determined by demand, judged by the market."

Affordability Remains a Barrier

EVs have become more affordable in the United States in the past few years—but they still cost more than comparable petrol-powered vehicles.

Moreover, Chinese carmakers like a leading brand, which have made rapid inroads in other markets due to low prices, have been largely excluded of the American market, due to high tariffs targeting cars made in China, supported by the last two presidential terms.

As of August, the typical cost of an EV in the United States was over $57,000, approximately 16% more than the typical price for all vehicles.

The most affordable battery car on offer, a Nissan Leaf, is priced around $30,000. In contrast, several models can be found for less than £20,000 in the United Kingdom.

Future Outlook

Analysts believe what consumers do next depends on how automakers set prices in the months ahead, as they face not only the expiration of the tax credit but also duties on foreign cars and specific car parts imposed earlier this year.

One automaker announced recently it would counteract the end of the tax credit by lowering the price for its lineup of electric models. But a competitor indicated the cost for monthly lease payments of some of its cars would increase.

A market specialist said she did not anticipate to see most companies copy that example, given the pressures from tariffs.

While some buyers may opt for EVs anyway, "next year is going to be hard," she cautioned, noting that the research group is projecting overall car sales to drop by about 2% in 2026.

"It was already difficult enough if all you had to manage is recent duties, but with these taxes and the incentive going away, there's two impacts."

Spending Reductions

Automakers had already been scaling back their spending in electric cars.

Analysts say recent policy changes could reduce those commitments further.

"This is a major blow to the EV industry—there's no tiptoeing around it," noted one research analyst.

"The subsidies were initially a way to create fairness and now that they're gone the United States has a significant progress to make up."

However, another analyst said she was reluctant to label the United States behind in an industry still exploring different options.

"Is [electric] really the right thing?" she said. "Saying that we're behind assumes that EVs are the sole answer and I think it's a little early to make that claim."