U.S. EV Sales Will Be Solid Rather Than Spectacular As Tesla Wobbles
President Donald Trump, joined by White House Senior Advisor, Tesla and SpaceX CEO Elon Musk and his ... More son X Æ A-Xii, delivers remarks next to a Tesla Model Y, a Cyber Truck and a Model S on the South Lawn of the White House on March 11, 2025. (Photo by)
Waning enthusiasm for electric vehicles in the U.S. has coincided with headline troubles for Tesla but the future for EVs looks solid although they won't be the dominant force zealots have been passionately claiming anytime soon.
Expect Tesla to stop the fall in sales and stage a firm recovery.
EV sales in the U.S. are expected to inch higher in 2025 to 1.3 million, according to UBS data. That would mean a market share of 10.8% versus last year's 10.4%. UBS expects steady market share growth, reaching 24% or 2.7 million by 2030. That assumes the Trump administration will see off the so-called California waiver, which allows states to set more stringent federal CO2 emissions standards. That would have boosted EV sales.
Auto Forecast Solutions expects U.S. EV market share to reach about 20% in 2030 and perhaps 30% in 2035.
This contrasts with an apparent upcoming boom in Europe, although this is based on government coercion rather than enthusiasm for EVs. Sales there are already close to the expected U.S. market share outcome for 2030, and the European Union has declared they will then account for about 80% of new sedan and SUV sales, 100% by 2035. If manufacturers fail to fulfill their mandated quotas, massive fines will result.
This means Europeans are effectively being forced to buy EVs as internal combustion engine vehicles become unaffordable because of the cost of cutting CO2 emissions to zero. Many experts reckon this EU plan is way too ambitious, and probably half the targets is a more likely outcome. There is growing political pressure in Europe to water down these quotas and extend 2035's complete ban on the sale of new ICE vehicles, and allow synthetic gasoline.
It's just as well there are no similar laws in the U.S., given the results of a survey commissioned by the American Automobile Association. The survey of consumers said interest in EVs had sunk to its lowest level since 2019. Only 16% of respondents were 'likely' or 'very likely' to choose an EV the next time they bought a new car. The percentage of customers 'unlikely' or 'very unlikely' to buy an EV as their next vehicle rose to 63% from 51%, the highest since 2022.
Meanwhile Tesla's sales have been falling in the U.S. and its shares have lost just over 25% of their value since late last year. This is because of a combination of factors. When Tesla was the new kid on the block, it was the entire market for EVs. But the competition has been sharpening up. Tesla's 2 big sellers - the Model 3 and Model Y - have recently been updated, which interrupted production. Founder Elon Musk's recent political involvement with the Trump administration has allegedly cost Tesla sales. This reporter wonders if any potential buyer would, after seriously examining all the choices, decide Tesla was the answer, then cancel the sale because of the owner's politics.
Tesla's market share in the U.S. has come under pressure but it still commands the EV sector from a great height. In 2024 its share slid to 48.7% from 55% the previous year, according to Cox Automotive's Kelley Blue Book. The new contenders weren't even close with Hyundai/Kia on 9.3%, then General Motors (8.7%), Ford (7.5%) and BMW (4.1%). In 2025's first quarter GM spurted, more than doubling EV sales to over 30,000, passing Ford and Hyundai/Kia. Tesla sales were down 9%. At the same time, demand for hybrids and plug-in hybrids is diverting sales away from pure EVs.
GM's Chevrolet Equinox EV (Photo by)
'The Tesla Model 3 and Model Y continue to be the best-selling electric vehicles in the U.S. (in 2024) by a long margin, but both ageing models saw notable sales declines. Still, the Model Y and Model 3 still accounted for more than 40% of all EVs sold last year. The Ford Mustang Mach-E was the best-selling EV not made by Tesla, followed by the Hyundai Ioniq 5,' Cox Automotive said.
Tesla's problems are holding back EV sales but both will recover healthily, said GlobalData analyst David Oakley. He expects Tesla's share of the overall U.S. market to steady at between 4 and 5% until the early 2030s, then increase to about 6%.
It was 3.95% in 2024, according to Kelley Blue Book
'I think it's certainly true that a slowdown in Tesla sales has held back the EV sector as whole in the U.S. However, we do currently see Tesla sales being essentially flat in 2025 and then starting to grow again in 2026. We also have the EV share of the market growing slightly in 2025 before somewhat more robust growth in subsequent years,' Oakley said in an email exchange.
But that depends on consumer tax-credits remaining. If the credits are removed, growth beyond 2026 would be weakened.
'While our forecast currently has an EV share at 20.7% in 2028, up from 9.2% this year, there's some considerable downside risk to that 2028 outlook. Also adding to that downside risk is the potential repealing of various emissions and fuel economy requirements, meaning that (manufacturers) could be significantly less motivated to develop EVs for the U.S. market,' Oakley said.
All those seem destined to disappear, subject to legal appeals.
Bernstein Research agreed American excitement over EVs has cooled in recent months, although market share will soon reach into the lower teens.
'The current focus of the market however, is the automotive tariffs and emerging trade war. While there are dire implications for the wider sector, we think that regardless of the tariff outcome, the U.S. will further slow EV growth. The cost pressures rising tariffs will put on the U.S. industry will reduce the available funding for loss-making EV businesses, limit investments, and pull executives' attention into other directions,' Bernstein Research said in a research note.
Ford Mustang Mach-E Rally (Photo by Jacek Boczarski/Anadolu via Getty Images)
Investors await Tesla's decision on the future of its range now the huge selling Model 3 and Y have been updated. The media has been full of conflicting reports about Musk's plans to make a smaller Model 2, which would be priced at around $25,000, about $15,000 below the starting price for the 3. The low cost, mass-market project is seen as an inevitable move if Tesla is to expand. Reports have said Tesla is weighing up the possibility of making it a stripped-down 3, or an all new smaller 2. They expect the pricey and niche Model S sedan and X SUV to continue.
GlobalData's Oakley said Musk's political involvement might have alienated some buyers, but could have attracted others.
'It now appears that Musk is taking a step back from politics, so we may never really know what the impact was. I think it could be true to say that there's been a sense that Tesla has been drifting recently as Musk's attention has mainly been elsewhere, but it isn't in some kind of downward spiral in my opinion,' Oakley said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
San Francisco Chronicle
7 minutes ago
- San Francisco Chronicle
Judge says administration can dismantle the Institute of Museum and Library Services
WASHINGTON (AP) — A federal judge on Friday denied a request by the American Library Association to halt the Trump administration's further dismantling of an agency that funds and promotes libraries across the country, saying that recent court decisions suggested his court lacked jurisdiction to hear the matter. U.S. District Judge Richard Leon had previously agreed to temporarily block the Republican administration, saying that plaintiffs were likely to show that Trump doesn't have the legal authority to unilaterally shutter the Institute of Museum and Library Services, which was created by Congress. But in Friday's ruling, Leon wrote that as much as the 'Court laments the Executive Branch's efforts to cut off this lifeline for libraries and museums,' recent court decisions suggested that the case should be heard in a separate court dedicated to contractual claims. He cited the Supreme Court's decision allowing the administration to cut hundreds of millions of dollars in teacher-training money despite a lower court order barring the cuts, saying that cases seeking reinstatement of federal grants should be heard in the Court of Federal Claims. The American Library Association and the American Federation of State, County and Municipal Employees filed a lawsuit to stop the administration from gutting the institute after President Donald Trump signed a March 14 executive order that refers to it and several other federal agencies as 'unnecessary.' The agency's appointed acting director then placed many agency staff members on administrative leave, sent termination notices to most of them, began canceling grants and contracts and fired all members of the National Museum and Library Services Board. However, a Rhode Island judge's order prohibiting the government from shutting down the museum and library services institute in a separate case brought by several states remains in place. The administration is appealing that order as well.
Yahoo
9 minutes ago
- Yahoo
Trump asks aides if they think Musk's behavior could be related to alleged drug use, source says
President Donald Trump has asked aides and advisers if they believe Elon Musk's behavior over the past 48 hours could be related to his alleged drug use, privately seeking to understand the tech billionaire's broadsides against him while signaling publicly he doesn't care, a source familiar with the conversations told CNN. In his own telling, Trump is not wasting any time thinking about the man who, one week ago, was receiving a giant golden key in the Oval Office and has since lobbed insults toward its occupant. The president told CNN's Dana Bash in a brief phone call Friday morning he was 'not even thinking about Elon' and wouldn't be speaking to Musk 'for a while.' But questions about the spectacularly public break-up have come nonetheless. Talking to reporters on Air Force One Friday night, Trump said he would 'take a look at' canceling some of Musk's government contracts, a possibility he had floated on Truth Social in the height of their feud, and asserted the country would be fine without them. 'The US can survive without almost anybody – except me,' he said, adding that he was joking on the latter point. Though the source said Trump had privately inquired about Musk's alleged drug use, the president declined to weigh in on the matter publicly. 'I don't want to comment on his drug use. I don't know - I don't know what his status is,' he said on Air Force One, adding that New York Times reporting on the matter 'sounded very unfair.' CNN has reached out to a Musk representative. When Musk was asked about the report during his Oval Office farewell with Trump a week ago, he declined to answer and attacked the newspaper instead. The Times reported that Musk was 'using drugs far more intensely than previously known,' as he rose to prominence in Trump's inner circle in 2024, including 'using ketamine often, sometimes daily, and mixing it with other drugs,' according to people familiar. In a 2024 interview with Don Lemon, Musk acknowledged he took 'a small amount' of ketamine to treat negative moods, under a prescription, but that a heavy workload prevented him from using too much. Neither Musk nor his lawyer responded to the Times' request for comment about his drug use. CNN also reached out to his representative about the allegations at the time. Last week, White House deputy chief of staff Stephen Miller, whose wife Katie Miller left a job with the Department of Government Efficiency to work for Musk, told CNN he had no concerns over the New York Times report that Musk used drugs more extensively than previously known. In the day since the Trump-Musk feud erupted on their respective social media platforms, Trump's aides said the president has been focused on advancing that supersized bill that started the whole thing, and has directed his team to follow suit. His online presence Friday morning was limited to posts about the economy, without any mention of the tech billionaire. He spent the morning on the phone — not with Musk, but with the new president of South Korea, whom he invited to the US for talks. He chatted with the president of Poland about the upcoming NATO summit. And before traveling to Bedminster, New Jersey, in the evening, he stopped to tour a golf course. Whether the president is successful in turning attention away from the ugly spat remains to be seen. The Justice Department's announcement late Friday afternoon that Kilmar Abrego Garcia has returned to the US to face criminal counts began to shift the narrative. Nor was it precisely clear what effect the wreckage of the Trump-Musk alliance would have on the president's agenda bill being considered by Congress, on Musk's businesses or on the direction of the Republican Party. All seemed potentially caught in the undertow after the two men spent Thursday afternoon and evening lashing out at each other online. A tipping point for Trump and his advisers, people familiar with what was happening behind the scenes said, was Musk's linkage of the president to Jeffrey Epstein. Musk suggested the administration wasn't releasing information about the convicted pedophile because it invokes Trump. (Musk cited no evidence and gave no detail how he would have gained access to unreleased files.) White House press secretary Karoline Leavitt called his claims an 'unfortunate episode' in a Thursday evening statement. After that, any chance of reconciliation appeared to be scuttled. For Trump, Musk's criticism of the major legislative package could only embolden Republicans who share the tech CEO's concerns the bill would explode the US deficit. Rep. Thomas Massie, who voted against the bill, told CNN that he thinks Musk's opposition could fuel buyer's remorse. And Rep. Michael McCaul, who supported it, said he worries that a prolonged fight between Musk and Trump could become a distraction for getting Trump's agenda passed, before going on to cite 'very good intelligence' that the two men would soon settle their spat. But Musk – who less than a month ago had said he'd spend 'a lot less' on politics – has also threatened to put his substantial spending power behind efforts to remove from office Republicans who vote for the bill. After spending more than $290 million to help elect Trump and Republicans last year, the future of Musk's political spending now appears unknown. Funds Musk privately promised to groups associated with Trump are now in doubt. One powerful Trump ally, Steve Bannon, suggested Trump use his power to go after Musk in multiple ways. He said on his 'War Room Live' show Thursday that Trump should begin deportation proceedings for Musk, saying he is 'illegal' and has 'got to go.' Musk was born in South Africa but became an American citizen in 2002. Bannon also suggested the Trump administration investigate Musk's alleged drug use, and potentially suspend his security clearance. Still, allies of both seemed to hold out hope the rupture would not be permanent, and that the two most dominant figures in current Republican politics might be able to patch things up. 'I'm not going to speak for either of them. I was with the president in the Oval Office yesterday afternoon as some of this unfolded. And I can just say he was disappointed. I mean, he said that himself. And I was, as well,' House Speaker Mike Johnson said Friday. 'I believe in redemption,' Johnson went on. 'I hope we can resolve it, get everybody together again. That's really important for all of us.' CNN's Hadas Gold, Molly English, Lauren Fox and Betsy Klein contributed to this report.
Yahoo
9 minutes ago
- Yahoo
Judge says administration can dismantle the Institute of Museum and Library Services
WASHINGTON (AP) — A federal judge on Friday denied a request by the American Library Association to halt the Trump administration's further dismantling of an agency that funds and promotes libraries across the country, saying that recent court decisions suggested his court lacked jurisdiction to hear the matter. U.S. District Judge Richard Leon had previously agreed to temporarily block the Republican administration, saying that plaintiffs were likely to show that Trump doesn't have the legal authority to unilaterally shutter the Institute of Museum and Library Services, which was created by Congress. But in Friday's ruling, Leon wrote that as much as the 'Court laments the Executive Branch's efforts to cut off this lifeline for libraries and museums,' recent court decisions suggested that the case should be heard in a separate court dedicated to contractual claims. He cited the Supreme Court's decision allowing the administration to cut hundreds of millions of dollars in teacher-training money despite a lower court order barring the cuts, saying that cases seeking reinstatement of federal grants should be heard in the Court of Federal Claims. The American Library Association and the American Federation of State, County and Municipal Employees filed a lawsuit to stop the administration from gutting the institute after President Donald Trump signed a March 14 executive order that refers to it and several other federal agencies as 'unnecessary.' The agency's appointed acting director then placed many agency staff members on administrative leave, sent termination notices to most of them, began canceling grants and contracts and fired all members of the National Museum and Library Services Board. The institute has roughly 75 employees and issued more than $266 million in grants last year. However, a Rhode Island judge's order prohibiting the government from shutting down the museum and library services institute in a separate case brought by several states remains in place. The administration is appealing that order as well.
