The electric vehicle (EV) market in the United States charged ahead in 2024, albeit with some speed bumps along the way. While sales growth cooled compared to 2023 and adoption lagged expectations due to concerns over pricing and charging infrastructure, the year ended on a high note with a surge in EV sales during the fourth quarter. Looking ahead to 2025, the landscape is set to stay dynamic, with policy shifts, competitive pricing and innovative models.
Modest Growth Turns Into Q4 Surge
For much of 2024, the growth of EV sales remained moderate as consumers grappled with the higher costs of electric models compared to gas-powered vehicles and charging challenges during long trips. However, EV sales in the United States rose 12% in the final quarter of 2024, reaching 356,000 vehicles, according to Cox Automotive. This late-year boost was driven by favorable economic factors, such as lower interest rates and enhanced incentives from automakers.
Tesla (TSLA – Free Report) , for instance, introduced a three-year lease for its Model Y hatchback starting at just $199 per month, while Kia offered two-year leases on its EV6 for just $159 per month. Ford (F – Free Report) sweetened the deal further by providing free home charging stations and installations for customers purchasing or leasing its electric models.
Adding to the fourth-quarter momentum was the uncertainty surrounding federal EV tax credits. President-elect Donald Trump’s proposal to eliminate the $7,500 tax credit for EVs priced under $80,000 seemingly created a sense of urgency among consumers. Many rushed to take advantage of the existing incentives before they potentially disappeared, providing an unexpected boost to year-end sales. These tax credits have been instrumental in making EVs more affordable, enabling manufacturers to offer attractive lease deals and promotions.
TSLA, GM & F: The Big 3 in U.S. BEVs
Per Cox Automotive, 1.3 million battery-electric vehicles (BEVs) in 2024, up from 1.2 million in 2023. This marked an 8% share of the nearly 16 million vehicles sold across all powertrain types, an increase from 7.6% in the previous year.
While EV giant TSLA continued to dominate with a 50% market share, legacy automakers like General Motors (GM – Free Report) and Ford outpaced the broader EV market’s growth, securing second and third spots, respectively, in U.S. BEV sales in 2024.
GM’s fourth-quarter EV sales more than doubled to roughly 44,000 units. For the full year, GM’s EV sales reached approximately 114,000, representing a 50% increase from 2023. The company’s diverse lineup, including the Chevy Equinox EV, Cadillac Lyriq, and GMC Hummer EV, positioned it as the second-largest EV seller in the United States behind Tesla.
Ford sold 97,865 all-electric vehicles in 2024, a 35% year-over-year increase. Sales in the December quarter totaled 30,176 units, up 16% year over year. The Mustang Mach-E led Ford’s EV portfolio with 36% sales growth. Hybrid models also played a crucial role, with Ford’s hybrid sales surging 40% to 187,426 units, offering a bridge for consumers transitioning from traditional vehicles to fully electric ones.
Tesla’s supremacy remained intact, but the company faced headwinds in 2024. Cox Automotive estimated that Tesla’s U.S. sales declined 6% in the year, marking its first-ever annual drop in deliveries. While the company’s fourth-quarter sales set a new record, it missed Wall Street expectations. Increased competition from legacy automakers and newer entrants began to erode its market share.
TM, HMC, Hyundai, Kia & Others
Hyundai and Kia capitalized on the growing demand for electric vehicles, achieving record sales in 2024. Kia’s EV9 and Hyundai’s Ioniq 5 were standout performers, alongside other models like the Ioniq 6 and Kona BEV. Together, these brands showcased the appeal of offering a mix of hybrids and fully electric options to cater to diverse consumer preferences.
Meanwhile, luxury automakers like Audi and BMW made their mark with premium electric offerings, including Audi’s e-tron lineup and BMW’s i4, i5, i7, and iX models. Nissan also saw notable success, with its Leaf and Ariya models achieving year-to-date sales increases of 57% and 47%, respectively.
Toyota (TM – Free Report) and Honda (HMC – Free Report) also made strides in the U.S. electrified vehicle market in 2024, driven primarily by hybrid and electric vehicle sales. Toyota’s electrified lineup, led by hybrids and plug-in hybrids, saw a 53% jump in sales, surpassing 1 million units for the first time. Electrified vehicles accounted for 43% of Toyota and Lexus’ total sales, bolstered by a robust portfolio of 30 models—the most among U.S. automakers, as TM claims. However, fully electric models like the BZ4X and Lexus RZ remain a smaller part of Toyota’s sales.
Honda’s hybrid and EV sales rose 19% to 349,000 units last year. The Honda Prologue, its first electric SUV, and a re-bodied GM EV emerged as a surprise hit. With 33,017 units sold in its debut year—despite a mid-year launch—it outperformed GM’s Equinox EV, Blazer EV and Cadillac Lyriq. Prologue’s competitive specs, size, aggressive deals and incentives like free chargers drove its success. If current trends persist, the Prologue could even become a top EV crossover in 2025, trailing market leaders like Tesla’s Model Y, Hyundai’s Ioniq 5 and Ford’s Mustang Mach-E.
Pure play EV makers like Lucid don’t provide region-specific sales breakdowns, although they deliver most vehicles in the United States only.
What’s in Store for 2025?
Despite potential policy shifts, including the elimination of federal tax credits and higher tariffs, electrified vehicles are expected to gain traction in 2025. Cox Automotive projects that pure EVs will capture 10% of total sales, crossing the 1.5 million mark for the first time.
Hybrids are likely to remain a strong contender, offering a practical middle ground for consumers hesitant to fully embrace electric mobility. The launch of new all-electric models, including GM’s Cadillac Optiq, aims to expand its premium EV lineup, while Tesla’s updated Model Y and a new, more affordable model could help the company regain momentum.
The pricing battle is expected to intensify, with manufacturers continuing to roll out attractive lease deals and promotions. At the same time, advancements in charging infrastructure and battery technology will play a critical role in alleviating consumer concerns and accelerating EV adoption. As new players, policies and technologies enter the fray, it will be interesting to watch how the U.S. EV industry fares in 2025.
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