In 2024, the American auto market saw a surge in EV and hybrid sales, despite the polarizing debates around electric vehicles in the country. Early sales estimates for the year indicate that EVs and hybrids played a significant role in keeping the U.S. auto market robust.
The U.S. EV sales received a boost in the fourth quarter, with an estimated 12% increase compared to the previous year. This pushed the total annual EV sales to 1.3 million units, accounting for about 8% of all auto sales. The overall auto market also saw growth, with total sales estimated to reach 15.9 million units, a five-year high for the industry.
The Biden administration’s decision to end the $7,500 tax credit on EVs was a key topic during the election campaign, prompting EV buyers to take advantage of the incentives before they expire. Analysts believe that the fear of policy changes under the incoming Trump administration drove buyers to make purchases in 2024.
While the EV surge is not expected to continue into 2025, automakers like Hyundai, Kia, General Motors, and Ford reported record sales in 2024, driven by strong demand for hybrid and electric models. Tesla also reported record fourth-quarter sales, despite experiencing its first annual decline in over a decade.
The threat of tariffs on vehicles manufactured in Mexico and Canada, as well as the potential repeal of consumer incentives for EVs, looms large in 2025. However, Cox Automotive expects the auto industry to expand by 3% in the coming year.
At the upcoming Consumer Electronics Show (CES 2025), tariffs will be a hot topic of discussion among automakers and electronics giants. The proposed export restrictions by China on key raw materials for EV batteries could further complicate the global supply chain network and impact the EV industry.
Looking ahead to 2025, the EV industry is set for another action-packed year with new electric models on the horizon. General Motors’ Cadillac Optiq and Tesla’s Model Y update are among the anticipated launches. Which 2025 EV models are you most excited about? Share your thoughts in the comments.