October auto sales reflect EV market’s new reality

The numbers are in—and they show that the EV market has officially started a new chapter.

Battery-electric vehicles made up just over 5% of new-vehicle retail sales in October, according to JD Power and GlobalData. That’s down more than half from September’s all-time high of nearly 13%.

The drop-off comes after the Sept. 30 expiration of federal tax credits for EVs of up to $7,500, thanks to President Donald Trump’s tax and budget bill. Industry analysts and executives predicted EV sales would fall as soon as the credits went away, and October’s sales numbers back them up.

Ford’s EV sales fell by nearly 25% YoY, while the automaker’s internal combustion engine vehicle sales grew 3.4% and its overall sales rose 1.6%.

Kia’s sales ticked up slightly in October. While the brand’s electrified vehicle sales (which include hybrids) grew by 16%, some all-electric models, including the EV6 and EV9, had lower sales.

Sister brand Hyundai reported a 2% YoY sales decline in October. Sales of the all-electric Ioniq 5 and Ioniq 6 models were down.

“Hybrid vehicles led the way in October with a 41% increase, and electrified sales were up 8%,” Randy Parker, Hyundai Motor North America’s president and CEO, said in a statement. “We saw strong EV demand leading up to the expiration of federal tax credits, and while that shift has temporarily disrupted the market, we’re confident it will reset.”

Honda’s sales inched up 0.7% YoY. The Honda brand’s electrified vehicle sales (including hybrids) set a new record for the month and made up nearly one-third of brand sales, though sales of its all-electric Prologue model dropped 80% from September.

Slowdown: EV sales surged in the months leading up to the credit’s expiration, boosting the new-vehicle market.

In an analysis released before industry sales reports, data provider Urban Science reported that industry sales were down as of October 25, “driven mainly by a 43% decline in battery and plug-in electric hybrid vehicles.”

Tom Kondrat, global lead for advanced analytics at Urban Science, said he expects BEV sales “to remain behind last year’s pace through Q4 and into the early part of next year” before picking up in the spring.

S&P Global Mobility analysts expect slower EV sales to contribute to “muted growth” in the new-vehicle market through the rest of the year.

New era: Hybrids’ market share climbed two percentage points in October to 14.2%, according to JD Power and GlobalData.

“While hybrid growth is encouraging, the recent EV market correction underscores a critical lesson: consumers prefer having access to a range of powertrain options that deliver comparable value,” Tyson Jominy, SVP of data and analytics at JD Power, said in a statement. “A singular focus on any one technology—be it EVs or hybrids—risks repeating past missteps. A diversified strategy that embraces multiple powertrain solutions will be essential to meeting evolving consumer preferences.”

Jessica Caldwell, AVP of insights for Edmunds, wrote in a blog post that “October mark[ed] the start of a reset period: one defined less by incentive-driven urgency and more by buyers motivated by genuine interest in EV ownership.”

And interest remains: According to Edmunds’ data, EV buyer consideration saw only a “modest” dip, from 12.7% in September to 9% in October. Going forward, Caldwell said, the EV market will be driven less by incentives and more by considerations like model variety and ownership costs.

“The ‘reset era’ will reveal which brands and retailers can make EV ownership feel not just aspirational but practical and within reach for the next wave of buyers,” she said.