Hybrid Sales Rise While Battery Electric Sales Remain Lower After Tax Credit Expiration

Electric vehicle sales are shifting, and the numbers tell a clear story about what happened after federal tax credits ended. Two credits for buying or leasing new electric vehicles expired on September 30, 2025. In the month before that deadline, battery electric vehicles hit a record 12% of new light-duty vehicle sales. Since then, their share has fallen. In the second quarter of 2026, battery electric vehicles made up 6% of new vehicle sales, down from 7% a year earlier. Plug-in hybrids (vehicles that can plug in but also run on gas) dropped too, from 1.9% to 1.4% of sales over the same period.

Regular hybrids, which run on gasoline and don't plug into the grid, moved the opposite direction. They now account for a record 16% of new vehicle sales, up from the year before. Hybrids never qualified for the federal tax credits that expired, so their gains suggest buyers are leaning toward vehicles that don't depend on that incentive. Even the luxury car market, where battery electric vehicles have traditionally sold well, saw a drop: electric vehicles fell from 22% to 14% of luxury sales in the same one-year period.

For homeowners thinking about an electric vehicle, this means the federal purchase incentives that applied through September 2025 are gone. Whether any state-level rebates or credits still apply depends on where you live, so it's worth checking what your own state currently offers. Despite the recent sales dip, electric vehicles still make up only about 2% of all registered vehicles on the road, based on the latest full-year data available.