In the wake of the federal electric vehicle tax credit’s expiration on September 30, 2025, U.S. EV sales experienced a dramatic downturn in October, underscoring the incentive’s pivotal role in driving consumer demand. Automakers like Ford, Hyundai, and Kia reported steep declines, with some models seeing sales drop by over 90%. This shift has sent ripples through the industry, prompting questions about the future viability of EVs without government support.

Data from major manufacturers reveals the extent of the fallout. Ford’s F-150 Lightning sales plummeted 92% compared to September, while Hyundai’s Ioniq 5 fell 86%. According to Car and Driver, this ‘October hangover’ was anticipated by experts, but the severity has surprised many industry observers.

The Tax Credit’s Legacy and Sudden Demise

The $7,500 federal tax credit, part of the Inflation Reduction Act, had been a cornerstone for EV adoption since 2022. It applied to purchases and leases, significantly lowering the effective cost for buyers. However, with the change in administration, the credit ended abruptly, leading to a rush of sales in September as consumers hurried to qualify.

Reuters reported in an October 1 article that automotive executives feared a ‘freefall’ in sales post-subsidy. Indeed, September saw a spike, with EVs flying off lots, as noted by Forbes, but October’s numbers confirmed the worst predictions.

Manufacturer-Specific Impacts: Ford’s Struggles

Ford, a key player in the EV market, bore the brunt of the decline. Sales of its Mustang Mach-E dropped 81% from September, and the overall EV portfolio saw a 39% year-over-year decrease. CNBC highlighted in a November 3 report that Ford’s EV sales fell massively as buyers pulled purchases forward.

Company executives attributed the drop to the credit’s end, with Ford’s chief financial officer noting in an earnings call that incentives had masked underlying demand challenges. This aligns with broader industry data from CNBC, showing similar patterns across competitors.

Hyundai and Kia’s Sharp Declines

Hyundai reported an 86% drop in Ioniq 5 sales and a 90% plunge for the Ioniq 6, according to Electrek’s November 3 coverage. The Korean automaker had enjoyed strong growth under the tax credit regime, but without it, affordability became a barrier for many potential buyers.

Kia, Hyundai’s sibling brand, saw its EV6 sales fall 90% and EV9 by 59%. As per Electrek, these figures reflect a market where price sensitivity reigns supreme, especially amid economic uncertainties.

Toyota and Other Automakers Feel the Pinch

Toyota’s bZ4X experienced a 91% sales drop, while Honda’s Prologue fell 96%, as detailed in reports from CNBC TV18. These Japanese brands, slower to embrace full electrification, relied heavily on incentives to compete with Tesla and others.

Even Tesla, though not directly mentioned in October’s steepest declines, faces headwinds. Posts on X from users like Ross Gerber in June 2025 warned that ending the credit could be ‘the nail in the coffin’ for EV adoption, reflecting sentiment gathered from platform discussions.

Expert Predictions and Pre-Credit Warnings

Prior to the expiration, J.D. Power forecasted a 60% collapse in EV sales for October, a prediction that proved eerily accurate. Carscoops reported on October 27 that demand would crash as buyers backed away without subsidies.

InsideEVs noted on October 31 that the ‘sales collapse’ had already begun, with experts like those from The New York Times in a September 29 article describing 2025 as a ‘pretty dreadful year’ for EVs due to the credit’s end.

Market Distortions and Consumer Behavior

The tax credit’s impending expiration created a distorted market in September, with NPR reporting on September 30 that sales spiked as contracts were inked before midnight. This pull-forward effect left October barren, exacerbating the drop.

Consumers, facing higher upfront costs without the $7,500 rebate, shifted toward hybrids or traditional vehicles. CNN Business, in a September 23 piece, questioned where prices would go post-credit, predicting tumbling sales but uncertain pricing adjustments.

Industry Responses and Adaptation Strategies

Automakers are scrambling to offer new deals to soften the blow. Forbes suggested on October 27 that incentives like rebates and financing could mitigate falling sales. Hyundai and Ford have already introduced promotions, but analysts doubt their long-term efficacy.

Seeking Alpha’s November 4 analysis explored EV sales trends post-credit, noting that while sales slumped, some brands like Tesla might weather the storm better due to brand loyalty and pricing power.

Broader Economic and Policy Implications

The sales plunge raises questions about U.S. climate goals and the transition to sustainable transport. Without incentives, EV adoption could slow, impacting battery manufacturing and supply chains, as Jesse D. Jenkins posted on X in June 2025, warning that killing credits early would ‘destroy the battery manufacturing boom.’

Reuters’ October 1 report echoed fears of a sales collapse, with executives bracing for reduced volumes. This could lead to job cuts in EV-related sectors, particularly in Republican-led states where manufacturing had boomed under the subsidies.

Global Comparisons and Future Outlook

Internationally, countries like Canada saw similar drops; X posts from Tablesalt in May 2025 noted a 46% plummet in EV sales after rebates expired. This suggests subsidies are crucial for early-stage adoption worldwide.

Looking ahead, The New York Times predicted eventual market recovery, but short-term pain is inevitable. Automakers may lobby for new incentives or focus on cost reductions to make EVs competitive without government aid.

Innovations and Resilience in the EV Sector

Despite the downturn, innovations continue. Companies are investing in cheaper batteries and improved range to attract price-sensitive buyers. Whole Mars Catalog’s X post from November 2024 urged placing Tesla orders before credits ended, highlighting ongoing enthusiasm among enthusiasts.

Yahoo News on November 4 described the situation as dire for EVs, with bestselling models seeing significant declines. Yet, this could spur a more organic growth phase, free from subsidy dependence.

Stakeholder Perspectives and Quotes

‘The end of the tax credit is a major setback, but it’s also an opportunity to prove EVs’ value proposition,’ said an auto executive quoted in Car and Driver. Real quotes from industry leaders emphasize adaptation over despair.

From NPR: ‘The market for EVs is a little distorted,’ capturing the pre-expiration rush. These insights from NPR and others paint a picture of an industry at a crossroads.

Long-Term Viability Without Subsidies

As EV technology matures, costs are expected to fall, potentially offsetting the loss of credits. InsideEVs’ October 31 article confirmed the predicted collapse but noted signs of resilience in certain segments.

MarketScreener’s November 4 report on the sharp drop underscored impacts on Ford, Hyundai, and Kia, but also hinted at strategic pivots toward hybrids to bridge the gap.