Hybrid sales rise while battery electric sales remain lower after tax credit expiration

In brief

Hybrid vehicles continued to gain ground in the United States during the second quarter of 2026, even as sales of battery electric and plug-in hybrid models weakened. Together, hybrids, battery electric vehicles and plug-in hybrids accounted for 24% of new light-duty vehicle sales, up from 22% a year earlier. Conventional hybrids reached a record 16% market share, while battery electric vehicles fell from 7% to 6% and plug-in hybrids declined from 1.9% to 1.4%. Unlike plug-in models, conventional hybrids use liquid fuels and do not draw electricity from the grid.

The decline in battery electric vehicle sales followed the expiration of two federal clean-vehicle tax credits on September 30, 2025. Battery electric models had reached a record 12% share immediately before the incentives ended, but their annual sales and market share declined in 2025 and remained lower during the first half of 2026. The downturn was also visible in the luxury segment, where their share dropped from 22% to 14% year over year. Despite their growing presence in new sales, electric vehicles represented only 2% of all registered US light-duty vehicles in 2024, the latest year with complete fleet data.

Source: EIA

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