US electric vehicle sales fell 27% year over year in the first quarter of 2026, with Cox Automotive‘s Kelley Blue Book describing the period as “a necessary reset” for a market now operating without nationwide federal incentives.
Automakers sold an estimated 216,399 EVs between January and March, down from 296,589 in the same period a year earlier.
The figure was also 7.8% lower than the previous quarter — an improvement compared to the 46% sequential drop felt between the third and fourth-quarter.
According to the organization, the results show that the post-incentive decline is beginning to slow.
In the fourth quarter of 2025, sales had dropped 36% year over year.
EVs accounted for 5.8% of new vehicle registrations between January and March.
The share is unchanged from the final quarter of 2025 — and remains well below the 10.6% peak reached in the third quarter, when buyers rushed to lock in the $7,500 federal credit before its September expiration.
“The US EV market has clearly entered a new phase,” Cox Automotive‘s Director of Industry Insights Stephanie Valdez Streaty stated.
Valdez Streaty added that, “with federal incentives gone, the first quarter reflected a necessary reset — sales slowed and market share shifted.”
Legacy Automakers
The year-over-year declines hit most legacy brands, with many posting drops of 60% to 70% or more.
Ford EV sales fell 69.6% to 6,860 units in the first quarter of 2026, extending the losses already seen in the final months of 2025.
At the same time, the decline reflects the Detroit automaker’s change in EV strategy late last year, which included ending production of the fully electric — and segment leader — F-150 Lightning.
VW Group‘s Audi and Mercedes-Benz recorded declines above 65%, while the Volkswagen brand’s sales dropped 87.7% to 1,177 units.
Volkswagen announced last week that it will end production of the ID.4 at its Chattanooga plant this month — replacing its only US-made electric vehicle with the gas-powered 2027 Atlas.
General Motors was a rare bright spot among Detroit brands, with Cadillac sales up 19.8% to 9,551 units on the back of the new fully electric Optiq and Vistiq SUVs.
The more affordable Chevrolet brand fell 30.4% to 13,359.
Japanese-based Toyota saw the highest increase in the past quarter. Its EV sales rose 79% to 10,042 units, as the bZ crossover ramped up.
Lexus RZ sales more than tripled to 4,456 units between January and March.
EV Makers
Market leader Tesla sold 117,300 vehicles in the quarter, down 8.4% year over year but enough to lift its share of US EV sales to 54.2% — up from 43.2% a year ago.
The Model Y alone accounted for 78,591 units, a 22.7% jump year over year and equivalent to roughly one in every three EVs sold in the US during the quarter.
Model 3 sales, however, fell 39.7% to 31,672 units.
Strong demand for the new, cheaper Cybertruck trim has yet to filter through to sales figures, with deliveries not expected to begin until June.
Rivian delivered 10,365 vehicles, a 21.2% year-over-year increase, driven by stronger EDV commercial van volumes and steady R1 demand.
The figure matched the global delivery total Rivian reported earlier this month, which beat Visible Alpha consensus.
The EV maker reaffirmed its full-year guidance of 62,000 to 67,000 vehicles as it prepares to begin R2 customer deliveries in late spring.
Lucid Motors posted a 3.5% year-over-year increase to 2,551 units, with the new Gravity SUV contributing 1,631 of those sales.
The Air sedan fell 62.7% to 920 units.
Cox Automotive’s figures for Lucid are lower than Motor Intelligence‘s estimates, even after the latter’s downward revision last week.
They are better aligned with the figures reported by the company earlier this month, however.
Lucid‘s first-quarter deliveries were disrupted by a 29-day stop-sale on the Gravity tied to a Camaco second-row seat belt recall.
Outlook
Cox Automotive expects the market to stabilise in the coming quarters, with growth driven by product and pricing rather than policy support.
According to Valdez Streaty, “what comes next will be driven less by policy and more by fundamentals: more affordable products, smarter pricing strategies, and continued investment in infrastructure.”
“Those longer-term fundamentals continue to support EV growth. The timeline has shifted, but the direction hasn’t,” she stated.
The EV share of new vehicle sales is likely to rise from here. However, the organization expects that the return to a share of 10% will be slow.
Middle East Conflict
Kelley Blue Book analysts flagged rising fuel prices — driven by the ongoing conflict in the Middle East — as a possible tailwind for EV interest.
Shopping traffic on Kelley Blue Book and Autotrader sites has improved in recent weeks, the report flags.
“It’s not uncommon for us to see a spike in EV-related searches when gas prices rise. Searching is free,” said Kelley Blue Book‘s Managing Editor Sean Tucker.
However, it does not necessarily translate into sales, he warned.
“A spike in actual sales would be unprecedented after just a month of high gas prices, because shopping for a new car is a long process influenced by many factors,” the editor added.
Research notes from Goldman Sachs and TD Cowen, cited by GM board member Jon McNeill on CNBC, have also flagged the oil price spike as a potential catalyst for broader EV demand.
RBC Capital analyst Tom Narayan lowered on Monday the firm’s price target on Tesla, Lucid and Ford shares.
Used EVs
The latest Cox Automotive data showed the average transaction price (ATP) of a used EV fell 8.5% year over year in February, to $34,821.
In the space of twelve months, the average price gap between used EVs and used petrol-powered vehicles narrowed to $1,334 from $4,923.
The used EV market is already showing the effects of shifting conditions.
Used EV transactions rose 12% year over year in the first quarter and 17% sequentially, according to Cox Automotive data released earlier this month.
The increase comes as a wave of off-lease vehicles from early-2020s leases expands supply and pressures new-EV pricing.
The growing used inventory offers buyers more choice, Cox Automotive said.
It also adds competition for automakers still trying to stabilise their new-vehicle volumes in the post-incentive market.
