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U.S. EV sales are expected to hit record highs in August and September as buyers rush to secure tax credits before they expire on September 30 under Trump’s OBBBA. Analysts warn demand may dip afterward, slowing adoption, while global EV markets surge ahead and U.S. automakers risk losing ground.
Why EV Sales Are Surging Right Now
Author(s): Chloe Aiello
EV sales could be record-breaking this month and next. The share that electric vehicles sales make up of overall car retail sales is expected to reach an all-time high in August, as consumers race to take advantage of the last few weeks of tax incentives before the September 30 deadline.
According to a recent report from J.D. Power and GlobalData, new vehicle retail sales are expected to jump 7.8 percent year-over-year in August—with electric vehicles accounting for a record 12 percent of retail sales. Just one year ago, EVs accounted for 9.5 percent of new vehicle retail sales.
“August’s retail sales results point to solid new vehicle demand,” Thomas King, president of the data and analytics division at consumer intelligence firm J.D. Power, said in a statement. “The results are unquestionably inflated by shoppers accelerating their electric vehicle purchases to take advantage of Federal EV credits—but the sales pace for non-EVs remains robust, especially given the modest discounts available on those vehicles.”
This year, the August sales reporting period includes Labor Day weekend, which is usually one of the biggest weekends of the year in terms of sales volume. Although King cited this as among the factors that could be distorting typical monthly sales trends, he added that manufacturer incentives are more restrained than usual because of tariffs.
Kelley Blue Book parent company Cox Automotive similarly reported elevated buying numbers for July. New EV sales climbed 19.7 percent year-over-year, accounting for about 9 percent of the total share of new vehicle sales. Some 130,082 new EVs were sold in July, marking the second highest month on record.
Kelley Blue Book lead editor Sean Tucker says he anticipates August and September will set records for EV sales. “I think it’s reasonable to say August will be the biggest month yet, and it’s reasonable to say September will be bigger than August, and then it will appear to fall off the face of the earth,” Tucker says. “But neither one of those numbers really reflects the demand for EVs.”
EV tax incentives, which were revised and extended by the 2022 Inflation Reduction Act, offer consumers credits of up to $7,500 for qualifying new EVs and $4,000 for qualifying used EVs. Following the passage of President Trump’s One Big Beautiful Bill Act (OBBBA), however, these incentives, which were set to expire in 2032, will now disappear after September 30 of this year. That means that consumers who would like to take advantage of the credit must purchase their EVs on or prior to that date.
“We’re seeing a bit of a pull forward effect in that people who would otherwise know they might need to car shop this winter are rushing to do it right now because they can get the incentive if they do it quicker,” says Tucker.
Tucker says the elimination of these incentives will not likely derail overall EV adoption, but will certainly slow it down, posing a significant threat to U.S. automakers.
“By the end of 2025, one in four cars sold globally will be electric. So the world outside is already hitting 25 percent and we are struggling to get to 10 [percent] with this massive incentive,” Tucker says. “The threat in the long term is if American carmakers double down on the V-8 engine and focus on America as an island, then these attractive, cheap, powerful EVs become common in the rest of the world, and we don’t know how to [keep up].”
There’s a similar trend going on with solar power; Canary Media reported that the U.S. is on track to set records this year for the amount of solar power installed. In the first half of 2025, developers built out 12 gigawatts’ worth of utility-scale solar with some 21 GW planned for the second half of the year, according to the U.S. Energy Information Administration. Solar was among those sources of clean energy most heavily affected by tax incentive rollbacks in the OBBBA, which eliminated production and investment credits for both wind and solar facilities that are placed in service after the close of 2027. That termination, however, does not apply for projects that begin construction within a year of the bill’s passage, according to Steptoe Law.
Credits: TCA, LLC.