Demand for electric vehicles is strong in the U.S. despite tariffs, declining Tesla sales and threats to tax incentives.
According to a March report from EV research house Rho Motion, the U.S. saw EV sales grow 28% in the first two months of 2025. The research house says the increase in sales could be due in part to President Trump’s adversarial stance on EVs.
“American drivers bought (nearly) 30% more electric vehicles than they had by this time last year,” Rho Motion data manager Charles Lester said, “making use of the final months of IRA tax breaks before the incentives are expected to be pulled later this year.”
While Mr. Trump hasn’t eliminated the Biden-era clean vehicle tax credit, his executive order “Unleashing American Energy” could weaken the policy. Additionally, Sen. John Barrasso, Wyoming Republican, introduced the Eliminating Lavish Incentives to Electric Vehicles Act last month, which would end the tax credit.
Also, Mr. Trump’s promise to slap massive tariffs on imports coming from Mexico, China and Canada threatens to raise auto prices. Rho Motion says those potential levies could be driving sales.
The report comes as the U.S.’ largest EV manufacturer, Tesla, hits turbulent economic headwinds. According to the report, Tesla saw a significant decline in its year-over-year sales in Europe and China, down by 47% and 15%, respectively. The Elon Musk-led company has also seen a marked depreciation in its market value, with its stock dropping over 40% since the start of the year.
This comes when the EV market is booming in Europe and China, according to Rho Motion. Europe saw 20% growth in sales during the first two months of 2025, with every country except France showing an improvement in revenue.
China blew Europe out of the water, showing 76% growth in year-over-year EV sales. The report notes that Chinese EV powerhouse BYD has remained undeterred by European tariffs on Chinese cars, with its sales figures rising every quarter. BYD sold over 130,000 EVs in the first two months of 2025.
