U.S. electric vehicle sales fell sharply after federal tax incentives expired in late 2025, according to a new report from CCC Intelligent Solutions examining EV sales, depreciation, total-loss frequency and repair costs.
The report, From Surge to Stall: What’s Really Driving the EV Market Reset, was written by Kyle Krumlauf, senior director of industry analytics at CCC.
“Following the expiration of the Inflation Reduction Act (IRA) tax credits at the end of September 2025, the EV segment experienced a dramatic decline in sales,” Krumlauf wrote in the report.
According to the report, EV sales increased 30% year-over-year in Q3 2025 before falling 36% in Q4 after the incentives expired. Sales continued declining into 2026, with Q1 EV volume down another 27% year-over-year to roughly 216,000 units — the lowest quarterly total since Q3 2022.
“At their peak in 2024, EVs represented approximately 8.2% of all light vehicle sales in the United States,” Krumlauf wrote. “More recently, EV share fell further to 5.8% of light vehicle sales in both Q4 2025 and Q1 2026.”
The report found leasing continues playing a major role in EV adoption. According to Experian data cited in the report, more than 58% of new EVs were leased in 2025, up from nearly 46% in 2024.
Krumlauf wrote the leasing trend is expected to increase off-lease EV supply over the next several years.
“Approximately 298,000 units” are expected to return to the market in 2026, Krumlauf wrote, rising to “600,000 in 2027 and approaching 795,000 in 2028.”
The report also examined falling EV values.
“Average adjusted vehicle values (AAVV) for EVs have declined by 46% since October 2022, compared to a 17% decline across the broader industry,” Krumlauf wrote.
According to the report, the falling values are beginning to affect total-loss frequency.
“In 2025, 12.7% of EV claims were flagged as total losses,” Krumlauf wrote, “representing an increase of nearly 2 percentage points from 2024.”
The report noted the broader industry total-loss rate stood at 23.1%.
Krumlauf also wrote EV depreciation may continue affecting insurers and consumers as used EV supply increases.
“From a claims standpoint, this level of depreciation has several implications,” Krumlauf wrote. “It may contribute to an increased share of total losses within the EV segment, influence salvage values, and affect consumer outcomes.”
The report also found the repair-cost gap between EVs and hybrids narrowed significantly between 2020 and 2025.
“In 2020, the average total cost of repair (TCOR) difference between EVs and hybrids in this age group was US$1,809, with EVs costing approximately 43% more to repair,” Krumlauf wrote. “By 2025, that gap had narrowed significantly to US$445.”
Krumlauf attributed the change to several factors, including “greater technician familiarity with EV platforms and improved parts availability.”
The report found EVs continue increasing their share of newer-vehicle claims despite the sales slowdown.
“Among vehicles three years old or newer, EVs represent 9.7% of the mix and hybrids 18.5%,” Krumlauf wrote.
