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The U.S. automotive industry witnessed a substantial rise in electrified vehicle (EV) sales in the first quarter of 2025, with EVs comprising nearly one in four vehicles sold. According to Urban Science’s latest retail sales report, total sales across all powertrains hit 3,076,573 units, up 5.8% from Q1 2024, fueled by a strong March that saw 1,270,589 units sold—a 12.5% increase over March 2024. Electrified vehicles, including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs), drove much of this growth, with sales rising 29.6% to 750,698 units, securing a 24.4% market share.
Key Highlights
- Electrified vehicles accounted for 24.4% of U.S. retail sales in Q1 2025.
- EV sales grew by 29.6% year-over-year, with HEVs surging 44.1%.
- California led EV sales, despite a 3% drop in BEV sales.
- Washington joined the top five states, reflecting wider EV adoption.
- Compact SUVs topped EV segments, holding a 5.9% share of all sales.
Sales Breakdown and Trends
HEVs emerged as the fastest-growing segment, with a 44.1% sales increase, outpacing BEVs (15.4%) and PHEVs (16.5%). This boosted HEVs to a 13.3% market share, up 3.5 percentage points from Q1 2024. Six brands—Toyota, Honda, Hyundai, Ford, Lexus, and Kia—dominated, representing 97% of HEV sales. Meanwhile, Tesla’s BEV market share slipped from 45.1% in Q4 2024 to 44.2% in Q1 2025, while non-Tesla BEV sales soared by 47%.
Among EV categories, compact SUVs led with a 5.9% share of total vehicle sales, followed by luxury mid-sized SUVs at 3.6%. State-wise, California remained the EV leader with a 16.7% sales volume increase and a 5.2% market share gain, though BEV sales fell 3% due to an 8.6% drop in Tesla sales. HEVs and PHEVs in California rose by 45.7% and 19.4%, respectively. Washington entered the top five, with HEV sales up 30%, PHEVs up 15.6%, and BEVs up 11.3%, achieving a 5.7% EV market share.
Incentives and Market Insights
Sales of vehicles eligible for Inflation Reduction Act incentives fluctuated, peaking at a 38.4% year-over-year increase in November 2024, then slowing to 10.1% in January 2025 before rebounding to 15.4% in Q1 2025. This suggests incentives significantly influence EV adoption amid policy uncertainty. Overall, the robust Q1 performance underscores the accelerating shift toward electrification in the U.S. automotive market.
For more details, visit UrbanScience.com.
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