Once upon a time, Americans could get big federal tax incentives for buying electric vehicles, heat pumps, rooftop solar, and home batteries. But the Trump administration scrapped those tax breaks last year — and no category of household cleantech has suffered more as a result than EVs.

Consumer spending on EVs has fallen off a cliff since the phaseout of the $7,500 federal tax credit at the end of last September.

In a rush to snap up that incentive before it disappeared, Americans spent a record $31 billion on EVs in Q3 2025 — only for that figure to plummet to around $18 billion for each of the last two quarters, per new data from the Clean Investment Monitor, a joint project of Rhodium Group and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.

It’s the equivalent of turning back the clock to early 2023 in terms of spending on EVs, which made up nearly 10% of new car sales in the U.S. in 2025. 

The effects have been less dire for other consumer cleantech, like distributed electricity and storage — primarily rooftop solar and home batteries — as well as heat pumps.

Under the 2023 Inflation Reduction Act, consumers could access tax credits that covered 30% of the cost of rooftop solar and home storage systems with no cap, as well as incentives that covered 30% of heat pumps up to a limit of $2,000 per tax year. The One Big Beautiful Bill Act eliminated those incentives last December.

Investment in rooftop solar and home batteries didn’t drop as dramatically after the expiration of the tax credits, and sales of heat pumps actually rose a little in Q1 2026. 

That suggests the EV tax credit was more motivating to Americans than the other incentives.

But the decline in EV sales so far this year may also be explained in part by broader trends in the auto sector. In the U.S., overall new vehicle sales were down nearly 7% year over year in Q1. In the current volatile economic climate, people are just buying fewer new cars.

Regardless, the bottom line is clear: New EVs are selling slowly in the U.S., far slower than in many other parts of the world, and far slower than climate advocates had hoped for. It’s unclear when the market will recover from its post-tax-credit malaise, but in the meantime, there is a bright spot: Used EVs are about the same price as used gasoline cars, they’re increasingly available, and they’re flying off lots.