The third quarter of 2025 delivered a surge in electric vehicle (EV) sales across the United States as consumers rushed to take advantage of the $7,500 federal tax credit before its September 30 expiry. General Motors, Ford, Cadillac and Tesla all reported strong numbers, but industry leaders warn the growth may be short-lived.
How did GM capitalise on the deadline rush?
General Motors recorded its best EV quarter to date, delivering 66,501 units between July and September. Year-to-date sales have already doubled to 144,668, exceeding last year’s total. According to GM, the Chevrolet Equinox EV was the standout, becoming the best-selling non-Tesla model in the U.S. with over 25,000 units sold.
Luxury also played a role. Cadillac placed three models – the LYRIQ, OPTIQ and VISTIQ – in the U.S. top ten luxury EVs, making it the segment’s top-selling brand. GM also started deliveries of its hand-built Celestiq, priced at $400,000, which will scale from 25 units this year to 500 annually in 2026.
Duncan Aldred, senior vice president of GM North America, said: “No one is in a stronger position for a changing U.S. market than GM. We have the best lineup of ICE and EV vehicles we’ve ever had. Our brands have grown market share with consistently strong pricing, and low incentives and inventory”.
Why was Cadillac’s performance so strong?
Cadillac achieved a milestone as 40% of its U.S. sales in Q3 came from EVs, representing 18,383 of its 46,525 total deliveries. This was a 145.5% year-over-year increase. The OPTIQ, VISTIQ and Escalade IQ were all new in 2025 and quickly took share from the LYRIQ, which still led the lineup with 7,309 sales.
Cadillac had forecast EVs would make up 30 to 35% of its sales this year. Instead, it has already outpaced that target. This success also helped GM report an 8% increase in overall U.S. sales in the quarter, to 710,347 vehicles.
What is Ford’s new approach post-incentive?
Ford used the end of the tax credit to recalibrate its electrification strategy. CEO Jim Farley acknowledged: “Customers are not interested in the $75,000 electric vehicle”. Instead, the company is prioritising hybrids and smaller EVs to appeal to a wider market.
Ford expects to launch a $30,000 electric pickup in 2027, likely with an optional range extender. Hybrids are already proving more attractive. The Maverick and F-150 hybrid pickups have gained traction, while pure EVs like the F-150 Lightning continue to face consumer price resistance.
Farley told reporters he “wouldn’t be surprised” if EV market share “were to halve to around 5% once the consumer incentive ends” . Ford projects $5.5 billion in EV and software losses this year, but insists hybrids and extended-range vehicles will remain central to its future.
How did Tesla defy expectations?
Tesla surprised the market with record global deliveries of 497,099 EVs in Q3, up 7.3% year-over-year and well ahead of forecasts. The Model 3 and Model Y accounted for more than 481,000 of those sales, while its premium models and Cybertruck dropped 30%.
The boost was heavily U.S.-driven, as buyers accelerated purchases to secure the tax credit. Analysts note that many of these sales were pulled forward. Tesla’s production for the quarter was 447,450 units, showing strong operational efficiency.
Yet challenges remain outside the U.S. In Europe, Tesla registrations fell sharply in markets such as Italy, where September sales dropped 25.6%. Analysts link part of the decline to brand perception, noting that “negative buyer sentiment partly stems from CEO Elon Musk’s controversial political stances”.
What comes next for the U.S. EV market?
Automakers are bracing for a softer market in late 2025. With the tax credit gone, Ford and GM are experimenting with lease structures that still capture the subsidy through dealer financing. Tesla has raised U.S. lease prices, while keeping purchase prices stable.
Industry-wide, Q3 auto sales in the U.S. rose around 6%, but analysts warn of contraction as incentives disappear. Farley summed up the challenge: the EV sector remains “vibrant,” but it “will likely be smaller than earlier expected”.
Can momentum be sustained?
The expiry of the federal incentive has left U.S. automakers facing a pivotal test. GM’s broad lineup and Cadillac’s EV gains show how fast adoption can grow under the right conditions. Tesla’s global record proves resilience, even as brand and regional headwinds weigh.
But with affordability concerns, policy shifts and consumer caution, the coming quarters will show whether Q3 2025 was a peak, or a stepping stone to a more stable phase of electrification.
