US EV Sales Slide in Jan 2026 as Incentives End

The US auto market kicked off 2026 with a typical slow January, reflecting seasonal patterns, harsh winter weather, lingering high vehicle prices, and the ongoing impact of the federal EV tax credit elimination in late 2025. New-vehicle sales remained subdued compared to year-end rushes, while electric vehicle (EV) adoption faced headwinds, with market share dropping notably from prior levels.

This SEO-optimized breakdown from ClickUSANews.com covers the latest January 2026 figures, key drivers, powertrain breakdowns, and what it means for American buyers and the industry in the year ahead.

January 2026 US New-Vehicle Sales Overview

• Total new-vehicle sales (including retail and non-retail): Projected at around 1.118 million to 1.13 million units (J.D. Power/GlobalData and S&P Global Mobility estimates).
• Retail sales: Approximately 908,500 units — a 3.7% decrease from January 2025 (adjusted for selling days, slight uptick possible).
• Seasonally Adjusted Annual Rate (SAAR): Forecasted at 15.2–15.3 million units — down from December 2025’s stronger ~16.0–16.1 million pace and slightly below January 2025’s 15.5 million.
• Consumer spending: Buyers spent about $39.7 billion on new vehicles, up modestly year-over-year despite volume dips.

The month saw typical post-holiday slowdowns, plus weather disruptions from winter storms. One extra selling day (26 vs. 25 in 2025) helped offset some declines, but overall momentum remained soft.

EV Sales and Market Share: Notable Decline

Battery-electric vehicles (BEVs) struggled in January 2026, as the loss of the $7,500 federal tax credit (ended in late 2025) combined with reduced manufacturer incentives pushed transaction prices higher and dampened demand.

• EV retail share: Projected at just 6.6% — down 2.9 percentage points from January 2025 (J.D. Power/GlobalData).
• Combined EV + PHEV share: Below 8% retail penetration (vs. nearly 12% a year ago).
• BEV-specific share: Estimated at 5.3% (S&P Global Mobility).
• Hybrids (HEV): Gaining ground at 14.7% share — up 1.4 points year-over-year.
• Plug-in hybrids (PHEV): Down to 0.9% (drop of 1.3 points).
• Internal combustion engine (ICE) vehicles: Rose to 77.7% share — up 2.7 points.

The shift highlights consumers favoring more affordable ICE and traditional hybrids amid economic caution, higher EV pricing, and incentives redirected to gas-powered models. Early 2026 data shows EV/PHEV penetration lagging year-ago levels by nearly 4 points.

Key Trends and Drivers in January 2026

• Post-incentive adjustment: The federal EV credit phase-out led to depressed BEV demand, with transaction prices rising and fewer deals available.
• Incentives shift: Manufacturers offered bigger discounts on ICE vehicles to offset slower EV sales.
• Affordability pressures: Persistently high new-vehicle prices (near record levels) and economic uncertainty weighed on middle-class buyers.
• Weather and seasonality: Winter storms and January’s historically low volume contributed to the chill.
• Broader 2026 outlook: Full-year US sales projected at 15.8–15.98 million units — down 2–2.4% from 2025’s ~16.3 million, per Cox Automotive and S&P Global. EV growth expected to remain muted in H1 before potential new models provide support.

What This Means for American Car Buyers

• Shoppers: January offered better deals on gas and hybrid models, while EV buyers faced higher effective costs without credits.
• Industry: Legacy automakers (e.g., Ford, GM) continue recalibrating EV plans amid write-downs and slower adoption; hybrids surge as a bridge technology.
• Tesla and others: Tesla maintains strong US EV dominance (despite global/prior-year challenges), but overall BEV momentum slowed.

The US auto market in early 2026 reflects a transitional phase: EVs face short-term hurdles, hybrids thrive, and affordability remains king. As new models launch and economic conditions evolve, watch for potential shifts later in the year.

ClickUSANews.com will track monthly updates, manufacturer reports, and forecasts. Stay tuned for February sales insights and EV policy developments.

Data compiled from J.D. Power/GlobalData, Cox Automotive, S&P Global Mobility, Reuters, and industry trackers as of early February 2026.

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