The Tipping Point That Didn’t Tip

In a  Cox Automotive analysis released a couple weeks ago about electric vehicle sales in the US, there is this:

“While the Q4 collapse will command headlines, total EV sales in calendar year 2025 tell a different story: Thanks in part to record volume in Q3, total EV sales last year came in just shy of 2024’s 1.30 million. In fact, 2025 was the second-best year on record for EV sales in the U.S., and the EV share of total market sales was a strong 7.8%, down from 8.1% a year earlier, according to Kelley Blue Book estimates.”

The ”Q4 collapse” was a decline in EV sales to 5.8 percent of the total US new vehicle market.

The “record volume in Q3” was a market share of 10.5 percent.

Realize that the modest stampede to dealerships to reach those Q3 numbers was undoubtedly due to people wanting to get a set of electrically powered wheels before the EV tax credit went away.

There is something to be said for a $7,500 government incentive to buy a new vehicle.

Turns out that that lack of a something resulted, in absolute terms, in a 4.7 percent market drop.

But the relative decline from Q3 to Q4 is 55.2 percent, a number that truly demands headlines.

You may recall that back in mid-2022, when EV sales in the US passed 5 percent of the new car market, there were lots of people talking about how EVs had crossed the “tipping point.” That meant that EVs had hit the point in the S-curve of technology adoption where there would be rapid acceleration. Sales would take off.

Somehow a 0.3 percent decline doesn’t seem like acceleration, nor is it in the right direction.

And Ford’s $19.5-billion in EV-related charges and GM’s ~$7.5 billion write-downs don’t bode well for EV sales in the US going forward. As they pivot away from EVs, what’s the likelihood that a larger number of consumers will turn toward EVs? Realize that both companies put in all manner of cool features and clever designs into their EVs while many gas-powered vehicles were on the proverbial back burner. The EVs were made much more appealing than their alternatives. When the attention at the OEMs turn toward ICE vehicles and hybrids, the EVs won’t be so special.

The European Automobile Manufacturers’ Association ( ACEA) has released its figures for 2025 new vehicle registrations and its number for battery electric vehicles is significantly higher than that of the US: 17.4 percent.

So from an absolute difference, the EV sales in Europe in 2025 are 9.6 percent greater than in the US—but from a relative difference, they are 123 percent larger.

In terms of actual numbers, US EV sales in 2025 were 1.28 million. In the EU 1.88 million. And the total US market is about 44 percent larger than the total EU market.

Although it is well known that the German government suddenly ended a purchase subsidy for EVs in late 2023—this was more of a surprise than the ending of the US tax credits that was engendered by the Big Beautiful Bill Act—which caused a sharp decline in German EV sales, there are still government programs in Germany that make the purchase of EVs economically advantageous (e.g., the Kfz-Steuer exemption, which is a 10-year exemption from an annual motor-vehicle tax). In 2025 there were 545,142 EVs sold, a 43.2 percent increase over 2024 sales.

Although the actual sales numbers of these countries are all smaller than those in Germany (which is the single biggest EU vehicle market), the percent increases in EV registrations from 2024 to 2025 are notable:

· Austria: 35.9 percent

· Bulgaria: 62.0 percent

· Denmark: 42.0 percent

· Ireland: 35.2 percent

· Italy: 44.2 percent

· Lithuania: 77.1 percent

· Poland: 161.5 percent

· Slovakia: 96.5 percent

· Slovenia: 103.9 percent

· Spain: 77.1 percent

And non-EU countries:

· Iceland: 125.0 percent

· Norway: 50.6 percent

Going back to the list of the EU countries, while I did cherry-pick the larger percentages of growth, of the top four economies in the EU there is only one missing from those numbers, France. Its 2024 to 2025 EV increase was 12.5 percent. So all of the top four (Germany, France, Italy, and Spain) have greater growth than was the case in the US from 2024 to 2025.

Like it or not, the dynamic of electric vehicles is being played out around the world. While the numbers—percentage and actual—in China are huge, let’s face it: western Europe is more similar to the US than the Middle Kingdom. And the adoption of EVs in Europe is clearly much more robust than in the US.

While this may engender not much more than a shrug among those who simply think that the market and the market alone should make a determination of what’s under the hood, there is a very real danger that the US becomes a technological backwater as companies in other countries develop battery and automotive electronics capabilities—and, importantly, capacities to make things—that a market that runs on gasoline just doesn’t have.

In some ways the problem has been a certain naiveté among people in and observers of the auto industry when it came to the acceptance of electric vehicles. Executives claimed there would be 40 percent or more of their sales as EVs by 2030. Analysts talked up the tipping point as though there was a technological determinism that could not be thwarted.

What I think was wholly underestimated is that electric vehicles just aren’t traditional vehicles with a new powertrain, which seems to be the unspoken belief by those people.

Sure, when there was the move from black-and-white TV to color TV there was a clear S-curve that accelerated. That’s because consumers didn’t have to do anything different in going from B&W to color. Everything worked the same.

But for EVs suddenly there were questions about range—something very few ever thought about with their gas-powered vehicles.

• Questions about whether you’d have a charger in your garage—and how many people understand the various voltages?
• Questions about where you could charge your vehicle in public—where the stations are (and let’s realize that “stations” were often cement bases with charging units stuck in them, not full-on convenience stores), how long it would take, and how much it would cost.
• Questions about where you could get them fixed.
• And more.

So here’s the question that must be considered on a national level: Does the US want to maintain competitiveness with Europe and China and elsewhere when it comes to automotive technology or does it want to simply continue to focus on internal combustion?

If it wants to compete, then it is going to be necessary for the Federal Government to provide the incentives to OEMs, suppliers, consumers, researchers, and other adjacent interested parties to continue to do the work that is required to create a self-sustaining EV industry.

Or we could just say that there’s no need for incentives, no need for fuel economy or emissions regulations, no need to encourage the development and acquisition of EVs.

Pursue a Galapagos strategy.

Focus inward and only inward. Ignore what everyone else is doing.

Works out really well. Until it doesn’t. Incompatibility leads to irrelevance.

Is that what we want?

Long-time automotive journalist Gary Vasilash is co-host of "Autoline After Hours" and is a North American Car, Truck & Utility of the Year juror. He is also a contributor to Wards Auto and a juror for its 10 Best Interiors UX and 10 Best Engines & Propulsion Systems awards. He has written for a number of outlets, ranging from Composites Technology to Car and Driver.

The TTAC Creators Series tells stories and amplifies creators from all corners of the car world, including culture, dealerships, collections, modified builds and more.

Check out Gary's Substack  here. Republished with permission.

[Image: Hyundai]

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