Hybrid sales rise while battery electric sales remain lower after tax credit expiration

Electric vehicle sales are shifting after two federal tax credits expired. The New Clean Vehicle Credit and the Qualified Commercial Clean Vehicle Credit both ended on September 30, 2025. Since then, battery electric vehicles (fully electric, plugged in to charge) have lost ground, while hybrids (which run on liquid fuel and never plug in) have kept gaining.

In the second quarter of 2026, hybrids hit a record 16% of new light-duty vehicle sales in the U.S. Battery electric vehicles fell to 6% of sales, down from 7% a year earlier, and plug-in hybrids (which combine a gas engine with a plug-in battery) dropped from 1.9% to 1.4%. Hybrids were never eligible for the tax credits that expired, so their rise has not been affected by that change. Battery electric vehicles peaked at 12% of sales in September 2025, right before the credits ended, and their sales have declined since, marking the first annual drop for that category. Even in the luxury market, where battery electric vehicles have traditionally sold best, their share fell from 22% to 14% over the same period.

For context, electric vehicles overall still make up a small slice of the vehicles actually on the road — about 2% of all registered light-duty vehicles as of 2024, the most recent year with full data. So even with sales swings, most driveways in the country still have gas-powered vehicles, and the recent shift mainly reflects which type of efficient vehicle buyers are choosing now that the federal purchase incentives are gone.