For the US EV Market, a More Turbulent Road Lies Ahead

Momentum for electric vehicles in the United States is starting to slip.

After years of rapid growth — fueled by federal incentives and nearly $200 billion in announced EV manufacturing investments — EV sales fell 4% in 2025 following a record-breaking 2024. Since then, at least $19.9 billion in planned manufacturing investments were canceled and automakers have begun rethinking their all-electric future.

Federal policy shifts are creating a turbulent environment for the industry: The EV purchase tax credit expired in September, funding for the National Electric Vehicle Infrastructure program was frozen for months, and new tariffs and proposed rollbacks of fuel efficiency standards added further uncertainty. Most recently, the U.S. Environmental Protection Agency finalized a rule overturning its endangerment finding, repealing federal limits on vehicle tailpipe emissions.

Yet, there are signs of progress: Charging infrastructure continues to expand, and states and businesses are stepping in to sustain momentum. While the industry is still growing, it’s now doing so more slowly.

This slowdown carries broader consequences beyond climate goals. Electric vehicles are a key driver of innovation across batteries, semiconductors, robotics, casting, artificial intelligence and software. As countries around the world — especially China and in Europe — accelerate their EV industries, a U.S. pullback weakens its global competitiveness.

Here we look at the current state of the passenger EV industry to better understand the impacts of the changing federal landscape and potential implications for U.S. automakers, suppliers and workers.