U.S. EV Sales Fall 26.8 Percent as Market Share Narrows

The latest automotive sales data for February 2026 details a clear contraction in the domestic electric vehicle sector. New battery-electric vehicle sales in the United States fell by 26.8 percent year-over-year to an estimated 68,951 units last month. This data comes from Cox Automotive, a prominent United States automotive services firm, and was subsequently highlighted in the March 2026 Foley Automotive Update published by the international law firm Foley & Lardner. Electric models accounted for just 5.8 percent of total new vehicle sales in the country during the month. This market share represents a significant drop from the 10 percent peak recorded during the third quarter of 2025.

The expiration of several federal incentives at the end of last year directly preceded this downward shift. Automakers and consumers alike are adjusting to a landscape with less government support. Average transaction prices for new electric vehicles sat at $55,300 in February. That figure is down slightly from early 2025, narrowing the premium over gas-powered vehicles to roughly $6,532, which analysts note is the lowest gap on record. However, buyers remain cautious in showrooms across the country. High borrowing rates and lingering concerns regarding public charging infrastructure continue to influence consumer behavior. Major automakers have collectively announced nearly $70 billion in electric vehicle-related write-downs and restructuring charges in recent months.

Used electric vehicle sales experienced a distinct upward climb during the same period. Consumers purchased 30,879 pre-owned electric models in February, representing a 28.8 percent increase from the previous year and a 4.2 percent rise from January. The average listing price for a used electric vehicle fell to $34,821. This drop brings the price gap between used electric models and their combustion-engine counterparts to just $1,334. Currently, 18 of the 26 brands tracked by industry analysts have average used electric vehicle prices sitting below those of their gas-powered equivalents. In hindsight, the influx of off-lease vehicles entering the market provided a highly accessible entry point for buyers who were priced out of the new car lots. Tesla led the pre-owned category with over 12,133 units sold at non-Tesla dealerships, followed closely by Chevrolet and Ford.

Sales performance varied significantly among individual brands last month. Tesla maintained its lead in new sales volume, moving 38,500 units. Chevrolet managed to surge its electric volume by 70.7 percent month-over-month, finding willing buyers despite the broader industry contraction. Hyundai and Toyota also recorded incremental volume increases in February compared to January. These targeted successes indicate that specific models still find traction when the pricing aligns with consumer expectations. Other companies are actively pivoting away from previous commitments. Stellantis recently canceled production of all plug-in hybrid models in North America beginning with the 2026 model year to prioritize conventional hybrids and range-extended variants. Honda is facing a projected loss of up to $15.8 billion tied to extensive revisions in its own electric strategy.

The domestic sales slowdown is happening alongside a complex global transition. Chinese-made vehicles face new regulatory hurdles internationally, including recently imposed tariffs of up to 50 percent in Mexico for products lacking a free trade agreement. Total new-vehicle sales in China increased last year, but policymakers have since introduced a new electric vehicle purchase tax and reduced trade-in incentives for 2026. In Europe, battery-electric vehicles accounted for 17.4 percent of the market last year, according to data from the European Automobile Manufacturers’ Association. Meanwhile, global automakers are recalibrating their production targets to match actual consumer uptake. S&P Global Mobility, a financial information and analytics firm, projects total United States auto sales across all powertrain types will reach 15.98 million units by the end of 2026.

Inventory levels for new electric models currently sit at a 76-day supply industrywide.

Manufacturers are adjusting their production schedules as they introduce their mid-year lineups. Electric vehicle maker Lucid Group recently announced a new midsize vehicle platform featuring three distinct models in an attempt to capture a different market segment. The immediate data reveals a consumer base that is highly sensitive to price and incentive availability. Dealerships are carrying more electric inventory than they did two years ago, and corporate strategies are pivoting toward hybrids to bridge the gap in demand. The introduction of new, lower-priced electric platforms later this year will test whether the current slump is a permanent plateau or a temporary adjustment. Next month’s reporting will capture the beginning of the traditional spring buying season.