Here’s why US EV sales may gain 3% in 2025 despite headwinds

• U.S. EV market share might be flat vs. 2024, but market expansion means 3% EV sales growth
• EV sales gained 58% looking past direct sales from Tesla, Rivian, Lucid, others
• California EV sales were close to flat for 2024, but non-Tesla EV sales gained 21%
• Policy wildcards include EV tax credit, tariffs, emissions policy, and charging infrastructure

Are U.S. EV sales still on the way up? 

The answer is yes, but there’s a complex set of factors at play, including the continued decline of Tesla sales, a rise in popularity of mainstream EV models, and all that’s potentially set to happen under a Trump administration. 

At the surface, it’s going to look like the EV market is just treading water. The analysts at the market research firm J.D. Power last week revised their EV retail market share forecast to be flat this year, with EVs at 9.1% of the U.S. retail market.

Behind that, J.D. Power cited a confluence of recent headwinds including vehicle-related tariffs, emissions policy softening, the potential removal of the EV tax credit, and the potential removal of federal charging-infrastructure funding (already in the obstructionism stage with a DOT freeze of funds). 

Looking ahead, it adjusted the entire trajectory for EV adoption in the coming years downward versus where it had been, but still on a climb after this year—to 26% of the market by 2030, with quite a wide range for variation. 

An expanding market, more mass-market EVs

While there’s all that uncertainty at the surface, and might not seem like EVs are gaining traction, there’s a lot happening from underneath. As J.D. Power noted, there was a 58% rise in 2024 in what it called “franchise EV sales.” Not including direct-sales EV brands like Tesla, Rivian, Lucid, Polestar, and others, these sales at traditional dealerships amounted to 376,000 units during the year. 

There’s also the reality that the tide is rising and the vehicle market as a whole is in expansion. In 2025, J.D. Power forecasts 16.3 million total sales—up 3% from 2024’s total of 15.8 million sales. And a flat market share of EVs means that they’ll gain by that same percentage in the market. 

“We expect a flat retail share for EVs,” said Tyson Jominy, J.D. Power’s VP of data and analytics, to Green Car Reports. “With total sales expected to grow 3%, so will EV sales.”

EV sales by volume rose by about 7% in 2024, up from a total share of about 8% of the market in 2023. 

EV sales growth nowhere close to previous forecasts

So while growth is still happening for the EV market in 2025, it is far below what analysts had anticipated at the start of 2024. Bloomberg analysts in January 2024 anticipated that EVs would reach a 13% U.S. market share in 2024, at 1.9 million vehicles, and the International Energy Agency, in April 2024, still anticipated that EVs would rise to 11% of the market in 2024. 

Further, pent-up demand for affordable models and the pending arrival of some of them, like the Chevrolet Equinox EV and Ford’s pivot to EV affordability, led some, including S&P Global Mobility, to point to more aggressive EV growth for future years versus previous forecasts. 

But that all changed with November’s election, when U.S. voters made a strong statement against a Biden administration vision that had included a longer-lens green-energy focus, a modernization of the auto industry and supply chain around it, and incentives that rewarded U.S. manufacturing. 

And there may be some surges and stumbles yet to the market in 2025, as policy changes. For instance, fourth-quarter 2024 EV sales were up—by more than 15% year over year—as dealerships saw a run on purchases due to concern that the EV tax credit might soon be going away. 

The California factor—or Tesla factor, or Musk factor

It’s impossible to assess EV sales and not include a look at Tesla and its pronounced downward trend in sales. After many years of gains, Tesla sales and deliveries fell in 2024—both internationally and within the U.S. 

And Tesla’s California sales downturn was a key piece of that. Take Tesla out of the totals, and the California data tells a wildly different story. According to it, California sales of non-Tesla EVs rose 21% in 2024, versus 2023. So especially for California, 2024’s EV sales dip might have been a very Tesla-specific problem while EV shoppers flocked to other brands and models that weren’t 

In California, EV sales have amounted to about 30% of the sales total, according to the California New Car Dealers Association, and more than a third of all EVs sold in the U.S. are sold in the Golden State. Less than three years ago California comprised an eighth of Tesla’s global deliveries. 

While in 2022, Tesla cracked 10% of the market share in what used to be its home state, it’s now on a steep fall from favor—and considering how sharply sales of other EVs rose, it’s hard to point fingers to a sagging EV market. 

Tesla’s 2024 sales totals in California (based on registration data from Experian Automotive) dropped by 11.6% versus 2023, while its actual market share of the entire California light-vehicle market dropped from 13.0% in 2023 to 11.6% in 2024. The Toyota Camry edged out the Tesla Model 3 for the top-selling passenger car in California during 2023, while the Tesla Model Y held on to its spot as the top-selling light truck.

Does Tesla’s California burnout extend to other states? It appears so. Tesla sold 611,755 vehicles in the U.S. in 2024, down nearly 5% from the 2023 total of 642,504, according to Automotive News, based on registrations. So despite an expansion of the EV market across the U.S., Tesla’s EV sales are in contraction elsewhere too, and it didn’t manage to produce sales gains. 

While there wasn’t significant EV sales growth in California in 2024, as J.D. Power pointed out there was indeed new growth in the EV sector coming from mass-market EV models, as well as in New York, Florida, and Colorado, which have emerged as new EV sales hotspots.

To tease out the takeaway from another angle, Tesla isn’t making up for its California sunset in those new states. Its California sales drop of nearly 27,000 lands below its national-total sales drop of 31,000. 

As several polls and market analyses concluded in 2024, Tesla CEO Elon Musk was getting in the way of Tesla sales as he became overtly political and then a participant on the campaign trail—and now a “special government employee” in the executive branch and, some have called it, an unofficial member of President Trump’s cabinet.

Based on those trends, and the quantitative trends emerging from sales data in 2024, it’s hard to imagine J.D. Power’s 3% EV market growth in 2025 happening through Tesla gains. 

As 2025 unfolds, it isn’t just Musk and his memes, but the policy he’s backing from the White House itself, that will affect how EV sales play out.