New EV sales fell 25% year-over-year in H1 2026 while hybrid sales rose 19.4%. Here is a clear-eyed look at what the data actually shows about where the EV market stands right now.
For most of the last five years, the story of the American car market was supposed to be straightforward: gas vehicles fade out, electric vehicles take over, and hybrids sit somewhere in between as a temporary bridge technology.
That is not what happened in 2026.
Hybrid sales are surging. Pure electric vehicle sales have stalled. Used EV prices are falling. Ford has discontinued the electric F-150 Lightning and taken a $19.5 billion write-down. General Motors paused development on next-generation electric trucks after a $6 billion write-down of its own. And the $7,500 federal tax credit that had been propping up EV demand for years expired on September 30, 2025, and has not returned.
The EV market is not collapsing. But it is going through a significant recalibration, and understanding what is actually happening, rather than what the loudest voices on either side are saying, is useful for anyone making a vehicle purchase or ownership decision right now.
The single biggest event in the recent EV market story was the expiration of the federal $7,500 EV tax credit on September 30, 2025. Cox Automotive’s Stephanie Valdez Streaty described the aftermath directly to CNBC: 2026 will be hard. The industry is trying to find that natural demand. What happened in the months after the credit expired confirmed how much of the prior demand had been incentive-driven rather than organic.
EVCUBE’s analysis of the Cox data puts the mechanics plainly: Q3 2025 saw record sales for new and used EVs as buyers rushed to lock in the credit before the deadline. That pulled thousands of future sales forward and created an artificially high baseline. The year-over-year comparisons that followed look dramatic partly because of that distortion. New EV market share fell from nearly 12% in September 2025, a record high, to 6% in January 2026 before stabilizing. The market is not in free fall. But it is no longer being artificially supported.
The IEA’s Global EV Outlook 2026 update quantifies where North America landed: EV sales totaled 0.73 million units in the first six months of 2026, down 20% year-on-year. Q2 sales fell approximately 25% below Q2 2025. That is a significant contraction by any measure, even accounting for the baseline distortion.
Tariff uncertainty has added a second layer of complexity that is harder to quantify but real. Recurrent’s 2026 EV Market and Trends Report notes that tariff uncertainty and shifting federal policy have adjusted the calculus for automakers as they make projections and investments in future model years, resulting in a new EV market that feels like it is in a holding pattern in 2026.
The other half of the story is where the buyers went. The answer, almost uniformly, is hybrids.
NADA’s June Market Beat report puts first-half hybrid sales at 1.21 million units, up 19.4% year-over-year, with hybrid market share climbing to 15.4%, a gain of nearly 3 percentage points in a single year. Battery-electric vehicle sales fell 25.1% over the same period. By July 2026, hybrids captured 15.9% of U.S. retail sales compared to an EV share of 7%, more than double the EV share, according to Appraisal Engine’s August market analysis.
Kelley Blue Book’s H1 2026 Brand Watch survey captures the shopper-level picture: hybrid consideration hit 22% of buyers in the first half of 2026, up from 20% a year earlier and a new record high. EV consideration slipped to 10%, meaning hybrids are now drawing more than twice the shopper attention of pure electrics. Non-luxury SUV consideration reached an all-time high of 71%, while sedan interest dropped to a record-low 25%, reinforcing the point that the hybrid surge is happening primarily in the SUV and crossover segments where most buyers are already looking.
The mechanics of why hybrids are winning this moment are not complicated. Urban Science’s Q2 2026 EV Sales Report summarizes the buyer logic clearly: hybrids ask nothing unfamiliar of a buyer. They do not require a dedicated charger or any change in refueling habits, and they deliver the fuel savings shoppers increasingly want. With no subsidy left to sweeten a battery-electric purchase and affordability concerns rising, the case for hybrids as an alternative powertrain choice is more relevant than ever.
InsideEVs reported this week that hybrid owners overwhelmingly chose to stick with the same powertrain type after their lease ended, with 58.3% of buyers going home with a new hybrid after trading in their old one. And as Corey Cantor, Research Director at the Zero Emissions Transportation Association, put it: a traditional hybrid is typically just a few hundred dollars to a thousand more than a simple gas model, so it makes sense to get a hybrid because of the promised fuel savings.
The used EV market tells a different and more nuanced story than the new EV market, and it is worth separating the two.
Recharged’s March 2026 used EV market analysis documents the price trajectory: average late-model used EV prices fell about 15% year-over-year by early 2025. After federal credits for new and used EVs expired on September 30, 2025, used Tesla prices actually rose about 4.3% while prices for most other used EVs slipped around 3 to 4%. The net picture is a used EV market where prices have fallen substantially from their pandemic-era peaks and are now, in many cases, competitive with comparable used gas vehicles.
Destination Charged’s April 2026 analysis puts the average used EV at $34,821 in early 2026, only $1,300 more than the average used gas vehicle. Used EV sales actually jumped 27.7% in March year-over-year according to Cox Automotive, and 44% of used EVs sold that month were priced below $25,000, suggesting that a price-sensitive buyer market has emerged around used EVs even as new EV demand has cooled.
The implication for used EV owners thinking about selling is that the window of elevated pricing has narrowed. As the 300,000 EVs returning from lease in 2026 add supply to the used market, prices in most segments are expected to continue softening. CarEdge projects used EV prices to fall 5 to 10% by late 2026 as that supply materializes. For owners of non-Tesla EVs in particular, the pricing environment is more competitive than it was 12 months ago.
The shift in consumer preference is reshaping automaker strategies in real time. EVCUBE’s analysis notes that Toyota is the standout winner, with EV sales jumping 225% year-over-year to 11,826 units powered by a refreshed bZ lineup, while its hybrid business continues to be the strongest in the industry. Tesla delivered 124,800 vehicles in Q2 2026, roughly half of all U.S. EV sales, yet that is down more than 10% for the first half of the year versus 2025, and its market share has slipped from a dominant 79.5% in 2020 to about 50.5% today.
On the losing side, the brands that built their near-term product strategies around an EV-only approach are facing the hardest adjustment. Ford’s discontinuation of the electric F-150 Lightning and $19.5 billion write-down represents the most visible example of how costly a misjudgment on the pace of mainstream EV adoption can be. General Motors has similarly paused development on next-generation electric trucks and SUVs after a $6 billion write-down of its own.
The manufacturers positioned best for the current environment are those who maintained strong hybrid lineups while developing EVs in parallel. Honda’s response has been to announce a new U.S. manufacturing plant specifically to address hybrid demand that is outpacing its production capacity. KBB’s Brand Watch data shows Honda leading in nine of 12 decision drivers among shoppers, including affordability and reliability, exactly the attributes that are resonating most in the current market.
The cooling of EV demand is real, but it does not mean EVs are a failed technology or a fading category. A few data points push back against the simplest version of the EV decline narrative.
Recurrent’s vehicle performance data makes a point that quarterly sales figures tend to obscure: real-world EV range is up 11% year-over-year. The fastest EVs now charge 100 miles in under 10 minutes. These improvements are not showing up in sales charts, but they are showing up every day for the people driving these vehicles.
California remains a market unto itself on EV adoption. Urban Science’s Q2 2026 data shows the state briefly touched 51% combined EV share in Q3 2025 and averaged 44.9% combined EV share in the first half of 2026, a level no other large market comes close to. On July 13, 2026, California approved a new instant rebate program for zero-emission vehicles as part of a $600 million clean transportation investment, providing state-level support after the withdrawal of federal incentives.
Several highly anticipated models arriving for the first time in 2026, including the more affordable Rivian R2, the competitively priced Volvo EX30 compact crossover, and BMW’s next-generation electric lineup, are injecting new energy into a segment that needed it. These launches represent a more realistic price point than the vehicles that defined the first wave of EV adoption, and they are arriving at a moment when used EV prices have fallen enough to create a genuinely competitive value proposition at both ends of the market.
The Pacific Northwest context matters here. Oregon and Washington have historically been among the strongest EV adoption markets in the country, driven by state-level incentives, a buyer demographic that skews toward environmental priorities, and the region’s abundant hydroelectric power, which makes EV charging significantly cleaner than the national average.
For buyers in Portland and Vancouver who are currently weighing EV, hybrid, or gas, the current environment offers something that did not exist two years ago: used EVs at prices that are genuinely competitive with comparable gas and hybrid vehicles. The inventory of quality used EVs has expanded significantly as early adopters move on to their second or third electric vehicle, and the pricing no longer reflects the premium that the federal tax credit used to generate.
For hybrid buyers, the challenge is increasingly one of availability rather than price. The hybrid shortage that JD Power flagged in its August 2026 forecast is real in Pacific Northwest dealerships, where AWD-equipped hybrids like the RAV4 Hybrid, CR-V Hybrid, and Outback Hybrid are in particularly tight supply relative to buyer demand. Buyers who find the right vehicle now should factor in that availability may not improve quickly.
For current EV owners who are considering selling, the pricing data suggests that acting sooner rather than later is the more conservative financial decision. Used EV prices are softer than they were 12 months ago and are projected to continue softening as off-lease supply grows through the remainder of 2026.
The EV market is not dying. It is recalibrating after years of incentive-driven growth, and the natural demand level that emerges from that recalibration is still being established. Hybrids are winning the current moment because they ask the least of buyers while delivering real fuel economy benefits at a price point that makes sense without a federal subsidy. Used EVs are becoming a genuine value proposition at prices that would have seemed impossible two years ago. And automakers are rapidly rewriting their product strategies around a market that did not develop the way their 2022 planning assumptions suggested it would.
For consumers, the practical takeaway is straightforward: there have rarely been more options at more competitive prices across more powertrain types than exist in the market right now. The challenge is knowing which of those options actually fits your situation.
Whether you own an EV, a hybrid, or a gas vehicle, understanding what your current vehicle is worth in today’s market is the most useful starting point for any decision. CarSolve’s free appraisal gives Portland and Vancouver sellers a real market price based on what dealers are actually paying right now.
Start your appraisal today at carsolve.com/sell-my-car/ and get the most out of your vehicle this Spring season.
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