Abhinav Kandula ’27
Throughout the past decade, electric vehicle sales have been on the rise. Each year, a record number of new models have been released. In 2025, EV sales reached an all-time high, as about 25% of new cars sold globally were EVs.
However, growth began to slow in late 2025 as government subsidies and federal funding for research were cut. Many buyers began to feel the burden of higher prices in a challenging economy, and many potential buyers had concerns about having access to charging stations.
This past fall, the $7,500 tax credit for EV buyers ended. Since the removal of this incentive, many EV buyers have opted for more affordable options, such as gas or hybrid vehicles. Analysts in the automobile industry call this shift ‘EV realism.’
Since the tax incentive was removed, American sales have slipped. This has opened the door for EV competitors from countries like China. BYD has overtaken Tesla to become the world’s largest electric vehicle company.
The rivalry between China and the US hints at a growing divide: EV sales are growing in countries where there are lower-cost EV models and greater government support. Even though Tesla has tried to compete by implementing price cuts, the competition has been too fierce, and Tesla has lost its grip on the EV market.
Other American legacy automakers, like Ford, have also struggled. Ford began scaling back the number of Ford electric vehicles after the tax incentives ceased, and Ford has lost money on their EV program. They’ve now turned to hybrid cars, which many customers who aren’t fully committed to electric automobiles feel more comfortable purchasing. This pivot has enabled Ford to make money in a more sustainable space at a time when EV vehicles face an uphill battle.
As we head further into 2026, analysts expect the EV market to grow at a much slower rate than it has in the past. The era of mass EV expansion, led by Elon Musk’s Tesla, has come to an end.
For the moment, car manufacturers are focusing on efficiency, profitability, and fewer EV models. This doesn’t mean that this is the end of EVs, but rather a shift to a more profitable short-term future, given the non-supportive EV policies that have been instituted in the US. In 2026, automobile manufacturers must weather the loss of EV incentives while keeping the EV industry alive, because EV automobiles or some version of them will lead us to the future.
Throughout the past decade, electric vehicle sales have been on the rise. Each year, a record number of new models have been released. In 2025, EV sales reached an all-time high, as about 25% of new cars sold globally were EVs.
However, growth began to slow in late 2025 as government subsidies and federal funding for research were cut. Many buyers began to feel the burden of higher prices in a challenging economy, and many potential buyers had concerns about having access to charging stations.
This past fall, the $7,500 tax credit for EV buyers ended. Since the removal of this incentive, many EV buyers have opted for more affordable options, such as gas or hybrid vehicles. Analysts in the automobile industry call this shift ‘EV realism.’
Since the tax incentive was removed, American sales have slipped. This has opened the door for EV competitors from countries like China. BYD has overtaken Tesla to become the world’s largest electric vehicle company.
The rivalry between China and the US hints at a growing divide: EV sales are growing in countries where there are lower-cost EV models and greater government support. Even though Tesla has tried to compete by implementing price cuts, the competition has been too fierce, and Tesla has lost its grip on the EV market.
Other American legacy automakers, like Ford, have also struggled. Ford began scaling back the number of Ford electric vehicles after the tax incentives ceased, and Ford has lost money on their EV program. They’ve now turned to hybrid cars, which many customers who aren’t fully committed to electric automobiles feel more comfortable purchasing. This pivot has enabled Ford to make money in a more sustainable space at a time when EV vehicles face an uphill battle.
As we head further into 2026, analysts expect the EV market to grow at a much slower rate than it has in the past. The era of mass EV expansion, led by Elon Musk’s Tesla, has come to an end.
For the moment, car manufacturers are focusing on efficiency, profitability, and fewer EV models. This doesn’t mean that this is the end of EVs, but rather a shift to a more profitable short-term future, given the non-supportive EV policies that have been instituted in the US. In 2026, automobile manufacturers must weather the loss of EV incentives while keeping the EV industry alive, because EV automobiles or some version of them will lead us to the future.
