Anxiety Over Gas Prices Points to ‘Looming EV Comeback’ in US
Just when it seemed American car buyers had left electric vehicles for dead, there are new signs of life in that corner of the auto market.
Tesla Inc. and Rivian Automotive Inc. each posted better-than-expected EV sales for the third quarter. Executives at Hyundai Motor Co. and Ford Motor Co. say dealers are asking for more battery-powered inventory to sell as customers come back. Even some lower-volume models from Toyota Motor Corp. and General Motors Co.’s Cadillac brand are gaining momentum.
It all points to EV demand that’s beginning to stabilize after last year’s boom-and-bust tied to the cancellation of generous U.S. tax credits for EV buyers.
Related: GM Loses Ground to Toyota as High Prices Reshape US Market
“Because of the war, because of gas prices, we’ve also seen a rise and a recovery in EV sales,” said Randy Parker, chief executive officer of Hyundai’s North America business. “I’ve got more and more dealers now asking for EV product.”
Republican-backed legislation signed by President Donald Trump eliminated the federal government’s $7,500 EV tax credit a year ago, part of his push to dismantle what he calls an “EV mandate.” The looming cancellation triggered a brief surge in sales, pushing EV market share to an all-time high of nearly 11% in last year’s third quarter.
The inevitable decline that followed left dealers with a glut of unsold EVs and many auto executives searching for a natural level of U.S. demand for EVs, without help from subsidies. That is beginning to come into clearer view.
EV sales have stabilized at close to 6% of the U.S. market this year, according to researcher Cox Automotive Inc.
Dealers have also sold through much of that excess inventory, going from about a 180-day supply of EVs in early 2026 to 78 days worth in August, roughly in line with industry stocks of vehicles with combustion engines.
U.S. demand for EVs continues to be limited by the same hurdles battery-powered cars faced a year ago, including spotty charging infrastructure, high sticker prices, lack of choices and consumers worried about running out of juice, commonly known as “range anxiety.”
To be sure, many automakers continue to report weak year-over-year EV sales. Even with high gas prices boosting the appeal of skipping the fuel pump, a demand boom for new EVs has not materialized. Instead, shoppers are snapping up gas-electric hybrids, as well as used EVs, which can be had for prices similar to their conventional counterparts.
But the latest round of quarterly sales reports this week hinted that that’s starting to shift. Take Rivian, which exclusively sells EVs. The company delivered 19,248 vehicles in the third quarter, well above the roughly 17,600 expected by analysts.
The results were likely buoyed by the first full quarter of shipments for Rivian’s new R2 model, helping generate a “strong sequential step-up” from second-quarter deliveries, JPMorgan analyst Rajat Gupta said in a note. Rivian hopes the midsize SUV will appeal to a broader swath of car buyers at around $50,000, well below what its larger R1 EVs often sell for.
Tesla also avoided a significant hangover from last year’s third quarter, when the temporary rush of buyers pushed sales to a record of nearly half a million vehicles. Against that lofty comparison, Tesla sold 486,532 EVs in the most recent quarter, a decline of just 2.1% and well ahead of the roughly 464,000 average of analyst estimates.
The strong results from Tesla and Rivian suggest a new wave of EV demand could be emerging, some market watchers say. TD Cowen analysts led by Itay Michaeli predicted earlier this year that a rebound in the U.S. could materialize in 2027 or 2028, thanks in part to next-generation vehicles and cars that offer more self-driving capabilities.
“We are still in the early stages of this looming EV comeback,” Michaeli said in an interview Friday. “EV market coverage, by our estimation, will grow substantially in the next couple of years by existing players.”
Hyundai had shifted its production mix to make more hybrids as the EV market began to stall. And even though dealers are asking for more electrics, the company isn’t planning to boost production, Hyundai’s Parker said.
“Always better to have one or two vehicles too few than have one too many,” Parker told reporters on Thursday. “The market is still very volatile because of the war, because of gas prices, and this thing could change again tomorrow.”
Ford, too, has dramatically reshaped its money-losing EV business, canceling multiple models and announcing $19.5 billion in charges. But even their dealers have started to ask for more electrics.
Rob Kaffl, Ford’s head of U.S. sales, said Friday that a dealer that very morning contacted him to help two customers shopping for a specific Mach-e, Ford’s electric SUV with styling inspired by the Mustang sports car.
“We’re seeing a lot of returning Mach-e customers who want to get back into another EV,” he said. While volumes haven’t rebounded significantly from last year, “the demand on Mach-e continues to be strong.”
Top photo: A 2025 Hyundai IONIQ 6 electric vehicle. Bloomberg.