US Faces Challenges in Electric Vehicle Adoption Amid Global Competitors

Fri Oct 10 2025 18:19:58 GMT+0300 (Eastern European Summer Time)

Despite a surge in electric vehicle sales, the US is lagging behind global markets in adoption due to lack of government support and rising prices.

While electric vehicle sales in the US have seen a significant increase, the market still trails behind other countries like China and the UK. Analysts attribute slower adoption rates to limited government incentives, high prices, and recent policy changes. The end of a crucial subsidy is expected to further reduce demand, raising concerns about the future of the electric vehicle market in the US as automakers scale back investments.

You could be forgiven for thinking that electric cars might finally be gaining momentum in the US.

After all, sales of battery cars topped 1.2 million last year, more than five times the number just four years earlier. Hybrid sales have jumped by a factor of three.

Battery-powered cars accounted for 10% of overall sales in August - a new high, according to S&P Global Mobility.

And in updates to investors this week, General Motors, Ford, Tesla and other companies all reported record electric sales over the past three months.

This marked a bright spot in an industry wrestling with the fallout from still high interest rates and buyers on edge over inflation, tariffs and the wider economy.

But analysts say the boom was caused by a dash to buy before the end of a government subsidy that helped knock as much as $7,500 (£5,588) off the price of certain battery electric, plug-in hybrid or fuel cell vehicles.

With that tax credit gone as of the end of September, carmakers are expecting momentum to shift into reverse.

It's going to be a vibrant industry, but it's going to be smaller, way smaller than we thought, Ford chief executive Jim Farley said at an event on Tuesday.

Even with the recent gains, the US, the world's second biggest car market, stood out as a laggard in electric car sales compared to much of the rest of the world.

In the UK, for example, sales of battery electric and hybrid cars made up nearly 30% of new sales last year, according to the International Energy Agency (IEA), while in Europe, they accounted for roughly one in five sales.

In China, the world's biggest car market, sales of such cars accounted for almost half of overall sales last year, according to the IEA, and they are expected to become the majority this year.

Analysts say adoption in the US has been slowed by comparatively weak government support for the sector, which has limited the kinds of subsidies, trade-in programmes and rules that have helped the industry in places such as China, the UK and Europe.

Former President Joe Biden pushed hard to increase take-up, aiming for electric cars to account for half of all sales in the US by 2030.

However, President Donald Trump has pushed to scrap many of those measures, including the tax credit, arguing that they were pushing people to buy cars they would not otherwise want.

Electric cars have become more affordable in the US in recent years - but they still cost more than comparable petrol-powered vehicles.

As of August, the average transaction price of an electric car in the US was more than $57,000, about 16% higher than the average for all cars.

Analysts say what buyers do next hinges on how carmakers set prices in the months ahead, as they contend not only with the end of the tax credit but also tariffs on foreign cars and certain car parts.

Carmakers had already been scaling back their investments in electric cars, and recent policy changes could reduce those investments even more.

It's a big hit to the EV industry - there's no tiptoeing around it, said Katherine Yusko, research analyst at the American Security Project.