Why EV Sales Are Not Growing Fast Enough in North America

Written by: Ethan Brown

Edited by: Sophia Eli

Junior Division

The automotive sector is one the heaviest polluters in the U.S. and Canada. It accounts for almost 30% of greenhouse gas emissions. Remarkably, many predictions estimated that humanity’s carbon footprint would soon decrease considerably due to the expected proliferation of Electric Vehicles (EV), as they pollute less and produce less emissions. This was the consensus just a few years ago, prior to 2025. However, more recently, Electric Vehicles (EV) sales have unexpectedly slowed significantly. Under current conditions, a study predicts EV sales will rise to around 4.1 million units in the U.S., or 27% of total automobile sales by 2030 (McKerracher, 2025). While this is good news at face value, EV sales must grow at more aggressive rates in order for North America to be at the forefront of the transition to a sustainable automotive market.

With the tremendous enthusiasm around EVs as an environmental solution, it is worth understanding how they mitigate climate change. As their name suggests, EVs are powered by batteries which are charged with electricity from the electrical grid. This is in contrast to conventional vehicles, which run on gasoline derived from oil. Oil inherently pollutes, as burning oil and gas in engines releases greenhouse gases such as Carbon Dioxide (CO2), while electricity usage has a more ambiguous effect on emissions. Typically, EVs also produce emissions at a significantly lower rate than gas-powered vehicles. Conventional cars' fuel efficiency, measured in miles per gallon (mpg), are usually between 25-30 mpg. Meanwhile, an “average EV in the US produces carbon dioxide emissions equivalent to a hypothetical 100 mpg gasoline car” (Reichmuth, 2025). Thus, EVs are many times more environmentally friendly.

Nevertheless, EVs still pose certain challenges. Research suggests that EV charging could increase global electricity demand by 11–20% by 2040 (Tilly et al., 2024). How cleanly that electricity is generated determines how beneficial EVs are. One novel issue that EVs pose is that they cause demand to surge for critical minerals including lithium, cobalt, nickel, graphite, and manganese, which are required in battery production. Mining for these raw materials frequently results in the degradation of local ecosystems and consumption of natural resources such as water (Snel, 2023). Likewise, the construction of the batteries also requires energy, albeit substantially less than that used in driving gasoline-powered cars. Despite these drawbacks, increasing EV sales have net positive effects on the environment.

Substituting gasoline-powered vehicles with electric vehicles is a cornerstone of any effective strategy against climate change. The rate at which this substitution is occurring in North America can be understood, in part, through EV sales. However, in the U.S., after consistent growth over the past five years, EV sales stagnated in 2025. From 2024 to 2025, EV sales experienced minimal shrinkage from roughly 1.3 million units to 1.28 million units, or from 8.1% of total automotive sales to 7.8%. This change was most pronounced in Quarter 4 of 2025 when the elimination of tax credits as part of the "One Big Beautiful Bill Act" kicked into place. Sales dropped to 234,000 units, which was down 46% compared to Q3 and down 36% year over year. (McKerracher, 2025)

In Canada, EV sales have faced even more dire challenges. They dropped 32% in 2025 due to trade tensions and the expiration of federal EV purchase incentives in January 2025. Previously, BloombergNEF had estimated that around 48% of new cars in the U.S. would be electric by 2030, however, in light of the recent decline in sales, it is now predicted that just 27% of total car sales will be EVs by the end of the decade (McKerracher, 2025).

Elsewhere in the world, a very different picture is being painted. Globally, EV sales rose by around 25%. This trend is most pronounced in China where 13.1 million EVs were sold in 2025. This represents more than half of global demand. Similarly, sales in Europe grew by around 20% to 2.6 million units. Emerging markets are also experiencing rapid growth by a staggering 50%, driven by EV expansion in Latin American and South East Asian countries. EVs are in a prime position to dominate the global auto market. Yet, if North America does not keep pace with the global EV market, it risks being left behind in the transition to a greener future.

The relatively bleak outcome in North America can be explained by a few factors. Firstly, supply: many EVs are out of reach financially for the average consumer. There is approximately a 40% price premium for a prospective buyer in the U.S., meaning that EVs are 40% more expensive than traditional gas-powered vehicles on average. Consequently, consumers opt to buy the cheaper conventional vehicles due to budget constraints. Companies do not sell any models to market that cost less than $30,000. This is in stark contrast to China where EVs are actually more affordable than a gas-power equivalent due to their advanced manufacturing capabilities.

Another reason EV sales in North America are lagging is political. Previously, the U.S. government under the Biden Administration legislated a $7,500 tax credit for consumers to purchase EV models that meet certain criteria, such as having been assembled in North America. This had the effect of supporting a burgeoning EV industry. However, many of these policies were eliminated in 2025, the first year of Trump’s second term. For example, the Trump administration removed the $7,500 credit as well as overruled ambitious targets from California to phase out gas-powered cars by 2035 and improve air quality (Sherman, 2025). Eliminating EV incentives hampers EV sales in both the short and long term.

Similarly, the reason Canada experienced a decline in EV sales is a lack of affordable models. The federal government abruptly and temporarily ended the $5,000 dollar incentives for zero-emission vehicles in part because funding ran out (Bubbers, 2026). Fortunately, the incentives have been reinstated and reformed in 2026. Additionally, sluggish EV sales in Canada have been a symptom of tough economic conditions in 2025, including low GDP growth and high interest rates. The tariffs and trade tension between the U.S. and Canada especially hurt the Canadian auto industry, as it led to less vehicle demand in general, for both conventional and electric. In 2024, Canada imposed 100% percent tariffs on Chinese EVs, and as of April 2025, Canada has a 25% retaliatory tariff on specific U.S.-made automobiles. While this protects Canadian manufacturers, it has the negative side-effect of hindering EV sales. Furthermore, across North America, the lack of an adequately robust high-speed charging network is also a barrier to purchasing an EV.

Although cleaner transportation is essential to a sustainable future, the transition to low carbon transit is not happening rapidly enough, as evidenced by the reduction in EV sales in the U.S. and Canada. It reflects a perceived lack of urgency to solve the problem of auto emissions. In order to seriously tackle carbon emissions from gas-powered cars, governments must provide comprehensive incentives. Manufacturers must build and put to market affordable EVs. Politicians need to prioritize expanding the quantity of EVs rather than limiting them by escalating trade tensions.

Naturally, EV sales will increase over time because the technology and charging infrastructure are on a path of constant improvement. The real question is: how long will the EV revolution take?

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References 

Bubbers, M. (2026, February 17). EVs hit their first speed bump in 2025. It won’t be the last. The Globe and Mail. https://www.theglobeandmail.com/drive/culture/article-evs-hit-their-first-speed-bump-in-2025-it-wont-be-the-last/

Chandra, M., Busch, P., Parés Olguín, F., & Tal, G. (2025). Paths of progress: Forecasting global electric vehicle demand amidst demographic and economic growth. Transportation Research Part D: Transport and Environment, 147, 104928. https://doi.org/10.1016/j.trd.2025.104928

McKerracher, C. (2025, February 4). Electric Vehicle Outlook - BloombergNEF. BloombergNEF. https://about.bnef.com/insights/clean-transport/electric-vehicle-outlook/#download-report-summary

Reichmuth, D. (2025, April 14). Electric Vehicles Help Combat Climate Change, Here’s Why. The Equation. https://blog.ucs.org/dave-reichmuth/electric-vehicles-help-combat-climate-change-heres-why/

Sherman, N. (2025, October 5). How the US got left behind in the global electric car race. https://www.bbc.com/news/articles/c8ex2l58en4o

Snel, P. (2023, November 30). Can Electric Vehicles Save the Planet? Department of Civil & Mineral Engineering. https://civmin.utoronto.ca/can-electric-vehicles-save-the-planet/

Tilly, N., Yigitcanlar, T., Degirmenci, K., & Paz, A. (2024). How sustainable is electric vehicle adoption? Insights from a PRISMA review. Sustainable Cities and Society, 117, 105950. https://doi.org/10.1016/j.scs.2024.105950