What's happened
Electric vehicle sales in North America declined 1% in 2025 amid policy changes, tariffs, and supply chain issues. Tesla and other US automakers are offering incentives to boost sales, while global EV demand remains resilient. Industry shifts include Ford ending a battery joint venture and Tesla's aggressive discounts.
What's behind the headline?
Industry Resilience and Challenges
The 1% decline in North American EV sales signals a significant shift from previous growth trends. Tesla's strategic discounts and incentives aim to counteract declining demand, especially after the loss of US tax credits. Meanwhile, Ford's decision to end its battery joint venture with SK On reflects a broader industry recalibration amid falling US EV sales and changing policy support.
Market Dynamics
The US market's decline contrasts with China's 19% growth and a 21% global increase, highlighting regional disparities. US automakers are adjusting strategies, shifting focus from EV expansion to energy storage and other segments. Tesla's focus on AI and robotics indicates a diversification away from pure EV sales.
Future Outlook
US EV sales are likely to remain subdued until policy support is restored or new incentives are introduced. Meanwhile, global markets will continue to expand, driven by model variety and policy incentives. Industry players will increasingly diversify their portfolios, with battery production and energy storage becoming key areas of focus.
What the papers say
The articles from Business Insider UK highlight the current US market struggles, with Tesla and other automakers offering incentives to sustain sales amid policy setbacks. Elon Musk's focus on AI and robotics signals a strategic shift for Tesla, while Ford's ending of its battery joint venture with SK On underscores industry recalibration. Ars Technica provides context on the broader industry shifts, noting the decline in US EV subsidies and the resulting impact on automaker strategies. The contrasting growth in China and globally underscores regional differences in EV adoption and policy support, emphasizing that US sales declines are part of a larger, complex industry transition.
How we got here
The EV industry experienced rapid growth fueled by Tesla's valuation and US climate spending. Automakers invested heavily in battery production and EV models. However, recent policy shifts, including the end of US EV subsidies and changing government priorities, have slowed US sales. Meanwhile, China and global markets continue to grow, but US automakers face headwinds.
Go deeper
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Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. The company specializes in electric vehicle manufacturing, battery energy storage from home to grid scale and, through its acquisition of SolarCity, solar
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Ford Motor Company, commonly known as Ford, is an American multinational automaker that has its main headquarters in Dearborn, Michigan, a suburb of Detroit. It was founded by Henry Ford and incorporated on June 16, 1903.