3 Signs EV Sales May Be About to Rise Again in the U.S. - Part One of Two

Electric vehicle market share in the United States has remained lower since September, when the federal EV tax incentives were ended. While EVs certainly still face headwinds, there are signs that the powertrain type may find its footing as we head into Q2. Several powerful trends suggest sales could start climbing again soon. Here is a glass-half-full look at the state of EV powertrains in America. You can find our accompanying story with three reasons EVs may remain stalled at this link.

1. A Perfect Storm Of High Gas Prices Should Help EV Sales
We are not making light of the ongoing conflict in the Middle East. It’s objectively a tragedy, whether you think its origins were sound or not. Torque News has contributors serving right now in the U.S. Army. We pray for a quick end to hostilities. That said, there is evidence that the resulting surge in gas prices has shoppers showing renewed interest in EVs when researching new vehicle purchases. This only makes sense. Many savvy shoppers look at the total cost of ownership when buying a new vehicle. Please do not interpret this as any sort of “silver lining” on our part. We are just being factual.

The media is doing its level best to scare the daylights out of consumers now that gas prices are - gasp - a buck fifty less than a few years ago. The truth is, when adjusted for inflation, gas prices are fine. But “What if…” fear, uncertainty, and doubt stories are starting to work their magic. Many folks feel like prices are very scary right now. Some are investigating how they can sidestep gas prices by switching to electric. It will be interesting to see what the shopping herd decides over the balance of March and into April. If the Straight of Hormuz being shut down tighter than a gnat's hindquarters doesn’t help bump up EV sales, nothing will.

2. EV Prices to Consumers Have Come Down
Pair high gas prices with EV prices going down, and you have a dynamic duo. Many manufacturers have dropped EV prices. Here are four examples of new lower cost EVs on the market today:
-The popular Hyundai Ioniq 5’s price dropped by $9,800 on average recently. 
-Tesla has added an all-new lower-cost entry trim to the legendary Model Y. 
-The New Nissan Leaf starts at a little over $30K. It’s updated, and all the downsides have been eliminated. It’s been on sale now for about four months.
-The new Chevy Bolt generation has just dropped. A dealer in my town has four available, and one is priced at under $31K. The new Bolt looks very promising.

In addition to those changes, some existing EVs, like the third-best-selling one from 2025, the Chevy Equinox, now have crazy cash-on-the-dash promotions for some trims. Five-figure discounts are out there for those who want to look around a bit. Even Tesla is discounting new vehicles.

There are still overpriced EVs out there and more coming, but the EVs that most people actually buy are at lower price points right now than they were months ago. We are in a period of EV price deflation. The whole point of the lower prices is to boost sales, and we think it will help.

3. A Boat-Load of EV Leases Are About to Start Ending, Which Could Spur New EV Leases and Sales
EV owners tend to buy more EVs. Loyalty to the powertrain tends to grow as owners adapt to and overcome charging and ownership obstacles. Look back 36 to 39 months, and you will see that EV leases really got rolling. For many popular models, up to 80% of new EV transactions were leases. Those leases were ridiculously subsidized by the manufacturers, who had to meet fuel-efficiency mandates and avoid paying other brands for the ZEV credits they needed. So they made the buy-out price of the lease super high, which lowered monthly payments. Those maturing leases are terrible buyout deals for the people currently on the lease. They’d be nuts to buy the car based on its artificially high residual value, given that used EVs are a dime a dozen right now. Many will turn in their 36 to 39-month-old EVs, and they will likely lease another new one. That will help pump up the new EV sales numbers a fair bit. We are going to come back to this topic in our counterpoint story because the buyer behavior is still not certain.

This story is entirely positive for EVs. It does not mean we think that EVs have an easy time ahead, or that we are sure our predictions will prove true. We’ve laid out three arguments that EV optimists can read and agree with. One thing seems pretty obvious. There is a critical three- to four-month period ahead for EVs. If EVs are going to regain their footing, now is the time for the turnaround. Outside forces and manufacturers’ efforts are combining to show some real hope.

Which way do you think the EV market is about to turn? Up or down? We doubt that EV market share will still be 6% heading into Q3. Will it rebound to 8% or will it dive to 4%? Tell us in the comments below. And be sure to check out our counterpoint story. 
 

John Goreham is a 14-year veteran of Torque News. An accomplished writer and a long-time expert in vehicle testing, Goreham also serves as the Vice President of the New England Motor Press Association and has a growing social media presence. He’s also a 10-year staff writer and community moderator for Car Talk. Goreham holds a B.S. in Mechanical Engineering and an undergraduate Certificate in Marketing. In addition to vehicle and tire content, he offers deep dives into market trends and opinion pieces. You can follow John Goreham on X and TikTok, and connect with him on LinkedIn.