US EV downturn eases as second-quarter sales rebound

By the Editorial Team · Thursday, July 16, 2026

U.S. electric vehicle sales rose by nearly 15 percent in the second quarter of 2026, driven by higher gasoline prices and increased consumer interest despite the loss of federal tax credits. This uptick signals a slowing of year-over-year declines and suggests the market may gain further momentum as more affordable EV models are introduced.

After more than a year of declining demand, the U.S. electric vehicle (EV) market showed signs of stabilization in the second quarter of 2026 as rising gasoline prices prompted increased consumer interest in battery-powered and hybrid vehicles. According to data from Cox Automotive, EV sales rebounded during this period despite the expiration of the federal electric vehicle tax credit last year.

Americans purchased an estimated 247,000 electric vehicles in the April-June timeframe, representing a 14.7 percent increase compared to the first quarter of the year. However, sales remained 20.5 percent below the same period in 2025, marking the third consecutive quarter of year-over-year declines. The rate of decline has, however, moderated; the 20.5 percent drop in the second quarter followed a 27 percent decrease in the first quarter and a 36 percent plunge in the final quarter of 2025.

The improvement is attributed mainly to the surge in gasoline prices linked to ongoing military tensions between the U.S. and Iran. Higher fuel costs have made fuel-efficient transportation options like electric vehicles more appealing to cost-conscious consumers. Analysts suggest that the market is beginning to regain momentum following challenges posed by policy shifts, rising financing costs, and uncertainty over EV incentives.

Tesla remained the dominant player in the market, accounting for about one-third of all EV sales in the second quarter and close to half of all sales for the year to date in the U.S. The strong demand was led by the Model 3 sedan and Model Y crossover. While Tesla’s first-half sales were down more than 10 percent compared to 2025, the company's market share showed improvement after falling below 40 percent earlier this year—the lowest level in eight years.

Other manufacturers also reported gains. Chevrolet secured the second spot in EV sales, driven by demand for the Equinox EV and Blazer EV. Hyundai and Cadillac maintained strong positions as well. Notably, Toyota posted a remarkable 225 percent year-over-year increase in EV sales for the quarter, a significant development given its historical focus on hybrid rather than fully electric vehicles. Subaru also reported a 108 percent rise in EV sales. Toyota is accelerating its battery-electric strategy and plans to introduce new models including an all-electric three-row Highlander SUV.

In contrast, some automakers saw declines. Ford, which recently discontinued the F-150 Lightning due to profitability issues, experienced a 40 percent drop in EV sales compared to the previous year’s quarter. More severe losses were reported by Volvo (41 percent decline), Mercedes-Benz (58 percent), and Nissan (88 percent).

Analysts anticipate that the EV market’s recovery may strengthen further as more affordable models reach the market. Upcoming entries like the Rivian R2, Slate Truck, and Ford’s proposed $30,000 electric vehicle aim to broaden consumer access by reducing the cost barrier to EV ownership.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.