The U.S. electric vehicle (EV) market underwent a sharp adjustment in the fourth quarter last year. The federal government’s $7,500 EV tax credit ended at the close of the third quarter, pulling demand forward and exhausting it. Even in these conditions, sales of some premium EV models rose, showing a distinct trend.

Cox Automotive data cited by EV publication InsideEVs on Jan. 15 showed U.S. EV sales in 2025 totalled about 1.27 million units. That was down 2 percent from 2024, when sales were about 1.3 million units, but it was the second-highest figure in U.S. EV sales history.

The figure did not reflect the abrupt market shift at the end of last year. After the $7,500 federal tax credit ended at the close of the third quarter, fourth-quarter EV sales came to 234,000 units. That was down 46 percent from the third quarter and down 36 percent from a year earlier. Most EV models struggled, but some brands and models recorded exceptional growth.

Porsche’s Taycan sold 1,672 units in the fourth quarter, up 23.6 percent from a year earlier. Tesla’s Model Y sold 92,460 units over the same period, up 8.1 percent. Cadillac’s Escalade IQ surged 211.2 percent to 2,085 units. The models are cited as cases of boosting sales without the tax credit.

Stephanie Valdez-Streaty, director of industry insights at Cox Automotive, said premium EV buyers are relatively less dependent on the $7,500 tax credit. She said the luxury segment showed growth even as most EV sales fell sharply.

By model, the reasons for growth differed. Cadillac’s Escalade IQ benefited largely from expanded production at the end of 2024, which helped sales gain traction at the end of 2025. Porsche’s Taycan drew consumer interest by strengthening its appeal through improvements in charging speed and battery performance.

Tesla’s Model Y also maintained demand after a mid-cycle refresh improved its design and suspension and it offered 0 percent financing through the end of the year. Tesla is still keeping interest-free financing for some trims, continuing a strategy to reduce the price burden.

Another point is that, excluding Tesla, most EVs that posted sales gains in the fourth quarter were luxury models. Those vehicles had base prices above $80,000 and were not eligible for the federal tax credit, so they were relatively less affected by the policy change.

Some in the market also say this trend shows a structural change in the EV market. They say EVs can grow sufficiently without incentives if their prices become similar to internal combustion engine cars and they achieve technical completeness.

More than 30 new EV models are set to launch in the U.S. market in 2026, and many target the mid-to-low price segment. They include the Nissan Leaf, Chevrolet Bolt and Rivian R2. Rivian R2 is drawing attention as a direct competitor to Tesla’s Model Y.

Valdez-Streaty said the data show new EVs from strong brands can grow despite policy changes, but this tends to appear first in the premium market. She added: "As in the auto industry's old formula, new models grow and old models decline."