George didn't get over-the-air updates. Photo courtesy of Majella Waterworth.

It Was The Best Of Times, It Was The Worst Of Times For Electric Car Sales In America

July 12, 20261 minute Steve Hanley 0 Comments

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Everyone expected the bottom to fall out of the new electric car market after the $7,500 federal incentive ended September 30, 2025, but these things have a way of evening out over time. There was a surge in EV sales before the federal incentive ended and a dramatic dropoff afterwards. That’s what’s happened before — in China, in Germany, in the Netherlands, etc. — when countries have eliminated electric car incentives. Governments wouldn’t create incentives if they had no effect on consumers.

But a strange thing is happening. EV sales in America are beginning to bounce back — not to the level they were when the federal incentive was available, but better than they were in the months just after the incentive expired. According to Kelley Blue Book estimates, 247,226 EVs were sold in the US in the second quarter of 2026 — up 14.7 percent from Q1. That’s the good news. EV sales were still off 20.5 percent from their peak in Q3 in 2025, but that is a lot better than the 35 percent drop in Q4. If you are “the glass is half full” type of person, that is reason enough to be (somewhat) optimistic about the future of EVs in America.

BloombergNEF tells a slightly different story. A few years ago, it projected EV sales in the US would reach nearly 50 percent by 2030. In its latest report, it has revised that number sharply downward to 17 percent. Does that seem dire to you? Patience, grasshopper. Currently, EV sales in the US are at just 5.8 percent, according to Cox Automotive. If BloombergNEF is correct, US electric car sales will triple over the next four years despite all the policy headwinds EVs are facing in America. That sound like good news to us here at CleanTechnica.

EV Market Stabilizes

The market now appears to be stabilizing after the anticipated correction, Cox Automotive said. New product launches, state-level incentive programs, and continued consumer interest are helping support demand. While the market is smaller than it was, the long-term trajectory for EV adoption remains positive. “The next phase of EV growth will likely be driven not only by advances in the technology itself, but by how effectively automakers translate those advances into products that meet consumer expectations for affordability, utility, performance, and ownership experience,” Stephanie Streaty, the director of industry insights at Cox Automotive, said.

Tesla continues to be the market leader in the US, with nearly 50 percent of all sales. Chevrolet, Hyundai, and Cadillac are all in the mix but much further back. What is somewhat surprising is that Toyota and Subaru both saw their EV sales double so far this year — from minuscule to actually noticeable.

There are some cynics in the crowd who believe the bulk of the federal tax incentives went into corporate coffers rather than the wallets of consumers. With the incentives gone, list prices for electric cars have magically declined. Funny how that happens, huh?

Meanwhile, EV charging infrastructure continues to expand — despite policy headwinds. There are now more than a quarter million charge points in the US, including 175,000 Level 2 facilities and 75,000 Level 3 plugs. That’s an increase of about 20 percent from a year ago, which suggests the fear of not being able to find a charger is decreasing slowly but surely.

As a side note, hybrid sales have jumped all across America, largely as a result of higher gas prices caused by the closure of the Strait of Hormuz.

US Automakers Back Chinese Technology Ban

And how are US auto manufacturers dealing with this small but significant wave of good news about EVs? By backing proposed legislation that will make it nearly impossible to import Chinese-made cars into the country any time this century. Tesla started the “computer on wheels” trend with the Model S in 2012. Its cars featured digital connectivity that allowed them to be updated “over the air,” eliminating the need to bring them to a dealership. Other manufacturers eventually were falling all over themselves to incorporate OTA updates into their own products.

But, Houston, we have a problem. It seems most of the computer components that make OTA technology work are sourced from China or other countries the US considers dangerous rivals. Xi Jinping and the CCP are listening in on all the data those components collect and transmit, apparently. It’s an obvious national security threat, and therefore, a bill in the Senate aims to protect innocent Americans from such intrusive foreign surveillance.

Yahoo! Finance reports that on July 15, the Senate Commerce Committee will take up the Connected Vehicle Security Act of 2026, introduced by Senator Bernie Moreno, a Republican from Ohio who made his fortune in the car business, and Senator Elissa Slotkin, a Democrat from Michigan, which is Ground Zero for the US auto industry.

A Question Of Connectivity

Yahoo says the bill is about more than keeping Chinese cars out. It targets connected vehicles and the specific software and hardware tied to China, Russia, Iran, or North Korea, including anything routed through joint ventures or entities those governments control.

“The hardware in question isn’t the engine or the suspension, it’s the vehicle connectivity system: the telematics control unit, cellular modem, and GPS module that let a modern car phone home. That’s the only part of a vehicle with an active, always-on link to a server outside the country, which is exactly why it’s the piece lawmakers want under control rather than the whole car,” Yahoo says. Of course, the US could simply mandate all that data be stored on US-based servers. That’s what China decided to do with data from Tesla automobiles. But that is not a sexy enough political solution for Moreno and Slotkin.

If the bill passes the Senate, it will go to the House, where changes will inevitably occur. If it eventually becomes law, several things will happen. Polestar, which is majority owned by Geely, will disappear from the US (or that may already be happening). Geely also owns a significant chunk of Volvo, which could imperil sales of its cars in America as well. Look a little deeper and you will find that Geely is also an investor in Mercedes. Could Mercedes sales in America be affected? Nobody knows the answer to that question quite yet.

Software tied to a foreign adversary would be prohibited starting in January 1, 2027, with hardware following three years later. “That gap isn’t arbitrary,” Yahoo says. “Code can be rewritten and pushed out in an over-the-air update cycle measured in months, but swapping a physical supplier for telematics hardware means re-qualifying parts, rewriting contracts, and rebuilding a supply chain that took years to establish. Giving hardware three extra years is Congress admitting that automakers can’t rewire a global parts network overnight, even one Washington has decided it no longer trusts.”

There are precedents here. The Bureau of Industry and Security, which is part of the Commerce Department, already finalized a rule banning the same connectivity hardware and software from China and Russia in January of 2025 using authority from a 2019 executive order and emergency economic powers law. What the Moreno–Slotkin bill does is take that agency rule and weld it into statute.

Future Proofing Policy

That distinction matters more than it may sound like. An agency rule lives and dies by whoever runs the executive branch. A future Commerce Secretary could narrow it, pause it, or rewrite it without asking Congress. A law requires an act of Congress to undo [or a decision of the Supreme Court] and “the whole point of a bipartisan Ohio Republican and Michigan Democrat teaming up is to lock it in before any administration gets cold feet on China policy,” Yahoo says.

“The list of groups cheering the bill tells its own story. UAW President Shawn Fain backed it as a way to put ‘common sense guardrails’ on a threat to organized auto labor. General Motors issued a statement of support. So did the CAR Coalition, the trade group representing the automotive aftermarket parts industry, which has its own reasons to care — aftermarket telematics units, infotainment retrofits, and replacement modules increasingly come from the same global electronics supply base this bill is trying to wall off. When the union, an automaker, and the parts aftermarket all show up in the same press release, that’s a bill with very little organized opposition left standing,” Yahoo says. [Emphasis added.]

US tariffs have effectively closed America’s front door to Chinese cars. “What this bill actually closes is the side door — the version of a Chinese-connected vehicle that shows up wearing a joint-venture badge, gets assembled in a third country, or ships with a Chinese-sourced telematics module bolted into an otherwise unrelated vehicle. It’s a supply-chain law dressed up as a trade ban,” Yahoo says.

Existing Cars Not Affected

It adds that those who are driving anything built before these compliance dates will not be affected. “The bans are prospective, tied to model years and import dates, and the civil enforcement lands on manufacturers and importers, not owners. But it’s worth filing this next to the ongoing fight over software-locked vehicles and repair rights, because both stories are really about the same question — who controls the code running underneath you, and how much say you get in that arrangement.”

Slotkin calls connected cars “surveillance packages on wheels,” collecting geolocation and driving data a foreign government could access. “That’s not a hypothetical worry confined to Beijing. Anyone who followed the Milwaukee officer caught running the location data for a license plate of a former romantic partner 179 times story last week already knows vehicle location data is a live privacy problem no matter which government or department is doing the collecting. The bill’s authors are betting voters find the foreign-adversary version of that risk easier to act on than the domestic one.”

Who Speaks For Consumers?

The upshot here is that the US government is putting up barriers to overseas competitors that will benefit domestic manufacturers more than consumers by excluding lower cost vehicles from the marketplace. Unknown is how the law would affect a driver of a Chinese made car coming into the US from Mexico or Canada. In theory, all cars made in those countries meet US vehicle safety and emissions standards and may be driven in the US legally. But the “national security” angle could alter that equation substantially.

Someone who commented on the Yahoo story seems to see the situation quite clearly. “I am no more concerned about data collected by Chinese companies than American ones. It is all bad. Ban it all.” Peering into the flux capacitor powered crystal ball at CleanTechnica global headquarters, we see more data collection in the future rather than less.

In this case, “national security” seems to be more about protecting US automakers from competition than protecting American consumers from electronic surveillance. We are already a surveillance society, with AI poised to turn that up to 11. Did you see anything in this proposed legislation that talks about the rights of consumers? No, and neither did we.

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