The recent decline in U.S. electric vehicle sales is not a story of consumer rejection but of supply failure, according to industry data. While Americans appear to be struggling to find electric vehicles at dealerships, hybrid sales climbed 18% over the same period, partly because those vehicles were actually available. Dealerships carried 19% more hybrid stock in March than a year earlier, while EV inventory tightened dramatically.
The supply crunch stems from policy changes and automaker retrenchment. A federal incentive worth up to $7,500 was removed at the end of September 2025, prompting manufacturers to slash output. General Motors eliminated over 3,400 positions in its EV and battery operations, while Ford absorbed a $19.50 billion write-down on its EV business, halted production of the F-150 Lightning, and repurposed a facility for gasoline-powered trucks. EV market share briefly hit 11.30% in September as buyers rushed to beat the credit deadline, then collapsed to 4.30% two months later.
When gasoline prices jumped from $2.94 per gallon to $4.35 following geopolitical tensions, the supply shortage became acute. Median discounts on new EVs narrowed from 9.8% below listed price in February to 4.7% by June, reflecting tightening supply rather than soft demand. New EV inventory fell from roughly 130 days of supply in Q1 to 78 days in August, and used EV prices climbed 13% by late June as available stock shrank to 31 days' worth.
Washington's policy direction continues to work against a recovery. Rules issued on September 28 loosen fuel-efficiency requirements for gasoline vehicles and phase out a credit-trading system in 2028 that had given manufacturers a financial reason to produce EVs. Government analysis suggests the change saves buyers around $1,289 at purchase but projects they will spend roughly $1,600 more on fuel over the vehicle's life.
Access to cheaper imported models is also blocked by policy. China accounts for roughly three-quarters of global electric car production, and in 2024 buyers there had over 130 electric models priced below $40,000, while American buyers could find just four. Import duties exceeding 100% on Chinese-made vehicles and a Commerce Department rule barring cars from manufacturers with Chinese ties from model year 2027 mean that gap is unlikely to close soon. Unless the U.S. reverses its current policy trajectory, EV makers like Massimo Group (NASDAQ: MAMO) could face an uphill task growing sales in the coming years, as the market remains constrained by supply-side decisions rather than consumer demand.
