Electric vehicle (EV) sales in the United States fell in 2025, while hybrid vehicle sales continued to gain market share, according to estimates from Omdia. Overall, around 22% of light-duty vehicles sold in 2025 were hybrid, battery electric, or plug-in hybrid vehicles, up from 20% in 2024. Among these categories, hybrid electric vehicles continued to grow, while battery electric and plug-in hybrid vehicles saw a decline.

In the second half of 2025, battery electric vehicle sales initially increased but then dropped sharply following the expiration of federal tax credits at the end of September. Two federal incentives—the New Clean Vehicle Credit and the Qualified Commercial Clean Vehicle Credit—expired on September 30, 2025. Battery electric vehicle market share reached a record 12% in September, just before the credits ended, but then fell to less than 6% in each of the remaining months. 2025 marked the first year in which annual sales and market share of battery electric vehicles declined.

Battery electric vehicles are particularly prevalent in the luxury vehicle market. Luxury vehicles accounted for 14% of total light-duty vehicle sales in 2025, and within that segment, battery electric vehicles represented 23%. The expiration of tax credits affected both luxury and non-luxury battery electric vehicles in similar ways.

These different vehicle technologies also have distinct implications for the broader energy sector. Battery electric and plug-in hybrid vehicles draw electricity either from isolated power sources or, more commonly, from the grid, influencing electricity demand. By contrast, hybrid electric vehicles do not require charging and thus do not directly affect grid electricity demand, nor were they eligible for the federal tax incentives that expired in September.

Despite the 22% share of new light-duty vehicle sales in 2025, the overall share of electric vehicles in the total US vehicle fleet remains relatively small. Based on S&P Global data reported in the U.S. Energy Information Administration’s Monthly Energy Review, battery electric and plug-in hybrid vehicles together accounted for only 7.5% and 1.6%, respectively, of the total light-duty vehicle fleet. In 2024, electric vehicles made up just 2% of all registered light-duty vehicles in the United States.

The data highlight how federal incentives strongly influence EV adoption, and suggest that, without policy support, battery electric vehicle growth may face short-term setbacks, even as hybrid vehicles continue to expand their market presence.