The U.S. Is Falling Behind in the Global EV Race
- Tesla posted its sharpest revenue and delivery drop in over a decade, as Elon Musk warns of turbulent quarters ahead.
- The U.S. EV market is slowing dramatically, with sales falling 6.3% in Q2 despite federal incentives.
- China and Europe continue to dominate EV growth, creating risks for U.S.-based manufacturers and energy infrastructure planners.
Tesla CEO Elon Musk has warned that the end of U.S. government support for electric vehicles could lead to “a few rough quarters,” following the automaker’s steepest revenue and delivery decline in more than a decade. Tesla is now relying on a long-promised affordable model and its autonomous ride-hailing roadmap to regain momentum, but immediate growth prospects look dim in the U.S. market.
The caution comes as global EV sales continue to rise. According to Rho Motion, 9.1 million EVs were sold worldwide in the first half of 2025, up 28% YoY. Not surprisingly, China led, with 5.5 million units, followed by Europe with 2 million. By contrast, North America added just 900,000 units, a modest 3% gain over last year, as reported by Electrek.
In contrast to strong global figures, the U.S. market is faltering. Data from Cox Automotive shows that EV sales in the U.S. fell by 6.3% in the second quarter compared to Q2 2024, totaling 310,839 units. This marked only the third quarterly year-on-year decline since EVs gained mainstream traction. Incentives remained high, averaging $8,500 per vehicle in June (nearly 15% of sticker price), but failed to spark additional demand.
Tesla’s global deliveries dropped to 384,122 vehicles in Q2, down 13.5% YoY, according to Reuters. Meanwhile, BYD reported a 16% increase in global deliveries and a 46% jump in battery-electric sales, overtaking Tesla in global BEV market share for the quarter.
General Motors delivered 46,280 EVs in Q2, more than doubling its volume from a year ago, and is now the second-largest EV seller in the U.S. Ford also increased sales but has slowed EV investment under the weight of cost pressures and revised capital priorities.
The U.S. policy environment is shifting rapidly. The “Big, Beautiful Bill”, signed by President Donald Trump earlier this month, eliminates the $7,500 federal EV tax credit as of October 1. It also ends credits for used EVs and home charger installations. Analysts expect a short-term Q3 bump from consumers rushing to claim benefits before the deadline, followed by a deeper Q4 slump, according to Reuters.
Infrastructure gaps are compounding demand risks. As of midyear, fewer than 400 fast-charging ports had been completed under the federal government’s $7.5 billion National Electric Vehicle Infrastructure program, far short of targets. Reuters notes that this shortfall could dampen adoption, especially outside metro areas.
Globally, momentum remains strong. China now accounts for more than 60% of global new energy vehicle output, aided by vertically integrated supply chains and steady model releases. In Europe, Chinese brands are gaining share despite new tariffs, offering low-cost BEVs that undercut traditional automakers.
For the energy sector, this divergence could bode ill. Utilities banking on rising EV-related electricity demand may need to revise projections downward. Battery producers that scaled up U.S. production could face excess capacity if demand softens. At the same time, firms tied to Chinese or European supply chains might just continue to benefit from sustained global growth.
Q3 may deliver a temporary lift in U.S. volumes, but this is now a fairly fragile game. Tesla’s ability to reposition with a lower-cost model, or make good on its robotaxi promises, will be the key thing to watch for observers looking to predict U.S. trajectory. Globally, EVs are increasingly embedded in the mainstream. But for now, the U.S. isn’t taking the lead. Instead, it’s barely managing to keep pace.
By Michael Kern for Oilprice.com
U.S. EV Makers Pivot to Energy Storage as Trump Targets Incentives
BloombergNEF slashed U.S. EV sales projections by 14 million units through 2030 due to policy rollbacks under Trump.
Automakers like GM and Tesla are refocusing on battery storage projects to meet rising electricity demands from AI-powered data centers.
Repurposing and recycling used EV batteries offers a new revenue stream and extends battery life beyond vehicle use.
The United States electric vehicle industry is facing a rough road ahead. The Trump administration has long promised to walk back a number of Biden administration policies aimed at climate change targets, including those designed to boost electric vehicle adoption. In light of the changing policy climate, BloombergNEF has lowered both its near- and long-term outlooks for EV sales in the United States for the first time ever, while the rest of the world’s numbers continue to climb.
BloombergNEF cut 14 million battery-powered cars from its sales projections through 2030 thanks to changing policies in the United States, which are removing supports from the EV industry as well as pressures to lower emissions. On the very first day of this term, Trump ordered the elimination of EV subsidies, and his administration is now loosening national fuel-economy standards, doing away with EV tax credits, and blocking California’s state-level emissions limits.
“President Donald Trump’s efforts to unravel policies supporting electric vehicles threatens to turn the US into a laggard for years to come,” reports Bloomberg.
As a result, the makers of EV batteries for U.S. markets are scrambling to find new buyers, and they’re increasingly turning to energy storage as a lifeline. Major companies like General Motors and LG are fast-tracking energy storage battery projects as they look to capitalize on a surge of demand on energy grids driven by data centers.
The proliferation of artificial intelligence is placing unprecedented stress on energy grids, and along with it, unprecedented opportunity for battery storage. In 2024, Tesla’s energy storage revenue jumped 67 percent last year to $4 billion, making it an increasingly central part of the EV company’s portfolio
And now GM has signed a “non-binding memorandum of understanding” with Redwood Energy to sell new and used EV batteries to a recycling firm for reuse in energy storage projects used as a sort of power bank for data centers. These batteries hold onto electricity and excess energy produced by wind and solar when production outpaces demand, which it then feeds back into the grid – or into a connected data center – as needed.
“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential infrastructure,” Kurt Kelty, GM's vice president of batteries, propulsion, and sustainability, said in a recent statement. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role. We’re not just making better cars — we’re shaping the future of energy resilience.”
In addition to newly manufactured batteries, used EV batteries have potential for new life in energy storage applications. EV batteries are retired when their range drops below a certain threshold, but they still have a lot of life in them that can be used in other applications, according to a recent report released by the Natural Resources Defense Council (NDRC).
“There’s definitely some potential in the utility sector, especially in terms of grid back-up storage … even though [old EV batteries] have lost, say, 20% of their original capacity… when you’re talking about grid storage that can still be a perfectly usable battery for several more years,” says Jordan Brinn, the report’s author.
And even totally used-up batteries can be repurposed for energy storage needs. According to Brinn, 95 percent of the minerals in a dead EV battery can be reused to produce new batteries either for EVs or energy storage systems. Either way, this provides a critical new sector for EV makers, who can sell off new and used products to recycling centers as EV sales continue to slump within a discouraging policy environment.
By Haley Zaremba for Oilprice.com
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