Identifying Pockets of Demand for BEVs, PHEVs and Hybrids in the U.S. Market

When the U.S. government rolled back federal tax credits for electric vehicles* (EVs) in 2025, automakers and dealers were uncertain how demand for battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hybrids would hold up. Many consumers rushed to make EV purchases, contributing to a third-quarter EV sales surge. When the Federal incentives expired, some original equipment manufacturers (OEMs), such as Stellantis and BMW, responded with incentive programs of their own. Others opted to reassess their EV plans, delaying product launches or shifting their focus toward hybrid platforms, fearing EV sales in the U.S. would plummet. 

As the automotive industry moves beyond initial responses to the end of federal EV tax credits, a clearer, more nuanced picture is emerging. While the EV market is highly dynamic, consumer appetite for electrified vehicles has remained present, concentrated in localized geographic pockets and EV subsegments. There is still plenty of opportunity for OEMs and dealers to capture demand. However, the EV sales landscape is constantly evolving, making reliable, timely, market-level data an essential tool in the next phase of adoption. 

A Signal in the Noise

According to the Urban Science 2026 Q2 EV report, total U.S. retail volume was down 0.2% from a year earlier, while combined EV sales rose 8.2%. With overall retail sales showing little movement, growth in electrified vehicle share points to a meaningful change in buyer behavior. 

Localized Support for EV Adoption

While federal-level tax credits have ended, some states continue to offer rebates, tax deductions and special programs designed to offset the costs of purchasing BEVs, along with installing home chargers. For instance, Colorado residents who buy or lease a qualifying EV may receive up to $3,250 through the state’s refundable Innovative Motor Vehicle Credit. California is also getting back into the state EV incentive game, offering a $3500 rebate with their “MyFirstEV” program. 

When you look outside of states with high market share and popular incentive programs, a few pockets of EV market share have emerged over the last twelve months. Together, they highlight a gradual broadening of the U.S. EV landscape beyond its historically dominant markets. This includes the following counties: 

• Maryland
  • Montgomery – 36.6%
  • Howard – 36.6%
• North Carolina
  • Orange – 40.8%
  • Durham – 35.7% 
  • Chatham – 31.7%
• New Mexico
  • Los Alamos – 33.3%
• Oregon
  • Multnomah – 44.9%
  • Benton – 41.9%
  • Washington – 39.5%
• Virginia
  • Falls Church – 40.4%
  • Charlottesville – 39.1%
  • Arlington – 38.5%
• Washington
  • Jefferson – 47.1%
  • King – 46.9%
  • Snohomish – 39.9%
• Other counties of note:
  • Tompkins, NY – 30.9%
  • Dane, WI – 30.7%
  • Johnson, IA – 30.4%
  • Scott, KY – 29.7%
  • Noxubee, MS- 29.2%
  • Hennepin, MN – 29.1%

State incentives are one of the reasons an OEM needs the ability to drill into demand at the state and local levels. In many markets where incentives are available and charging networks are robust, consumers show a healthy appetite for EVs. With the right data, an OEM can identify pockets of opportunity and align its inventory, marketing and sales strategies accordingly.  

The Powertrain Mix

Hybrids powered the EV sales market in Q2. HEV sales climbed 26% year over year in Q2 and reached 1,020,296 units through June 30, more than double the 426,502 battery-electric and 75,199 plug-in hybrid vehicles sold over the same stretch. Hybrid strength reaches beyond a single quarter. HEVs accounted for 16.9% of all retail sales through June, up 16% from a year earlier. While hybrids see generally larger market share nationally, the demand is not equally distributed geographically and demographically.  

Additionally, Urban Science’s analysis of month-to-month vehicle sales found BEV sales fell approximately 3% year over year in April 2026. At first glance, this decline might suggest a bleak outlook for nationwide EV sales. However, the picture changes when this figure is viewed in a broader context. During the same period, overall vehicle sales fell 7% year over year.  

In other words, BEVs outperformed the rest of the retail industry on a year-over-year basis in April and actually had a higher share of the retail market. Notably, despite the elimination of the $7,500 federal tax credit, both Tesla and Rivian sold more BEVs in April and May 2026 than they did the previous year when the rebates were in effect. 

The strongest demand for electrified vehicles is no longer concentrated in smaller segments. Four of the five best-selling electrified segments in Q2 were trucks and SUVs, with large SUVs breaking into the top five and displacing compact cars, reflecting the market’s ongoing shift toward utility vehicles. 

As the figures from each of these states demonstrate, generalized headlines and one-size-fits-all readings of the EV market do not always reflect on-the-ground sales realities. By tracking demand across powertrains, fuel types and geographies, Urban Science’s MarketView™ EV Dashboard provides the science-driven signals an OEM needs to cut through the noise. The tool applies MarketView’s vast industry sales insights through an EV-focused lens, empowering automakers and dealers to: 

• Identify pockets of EV demand 

• Visualize forecasts 

• Benchmark competitive performance 

• Analyze how sales opportunity intersects with charging coverage 

How Daily Automotive Sales Data Powers AI Optimization

One factor contributing to healthier-than-expected EV adoption is the price of gasoline. Geopolitical conflict has sent fuel costs soaring, prompting some consumers to weigh the cost advantages of electrified powertrains. In states like California, where drivers already face some of the country’s highest prices at the pump, electrified options may look especially attractive. But gas prices are not the only factor driving EV consideration. State incentives, new affordable models and a growing supply of certified pre-owned (CPO) inventory are also changing how consumers evaluate EVs. 

New Entrants and Affordable Models

Much of the conversation has centered on the arrival of Chinese automakers, but market dynamics are also being influenced by U.S. brands such as Scout, Slate Auto and Rivian. Together, they reflect the growing range of choices available to EV shoppers. 

As battery technology improves and production scales, the cost of electrification continues to decline. In response, automakers are introducing more affordable EV options aimed at expanding adoption among cost-conscious consumers. For example, Rivian’s recently-launched R2 model is the brand’s most affordable yet. 

Elsewhere, Slate Auto’s modular electric truck has drawn attention for its low-cost, customizable approach. Legacy brands are also making efforts to lower barriers to EV adoption: Ford recently made headlines with its plans for a cheaper electric pickup truck and Kia’s EV3 will join the ranks in 2027 as their most affordable EV in their lineup. 

As new entrants and lower-cost models influence consumer behavior and purchasing decisions, each OEM will need to balance near-term sales with future readiness. The MarketView EV Dashboard uses daily industry sales data and Urban Science’s proprietary modeling to deliver demand forecasts, updated quarterly, so each OEM can track current performance and anticipate long-term sales trends. 

An Emerging CPO Play

CPO vehicles are emerging as an increasingly viable path to lower-cost EV adoption. Many EVs are now reaching the point in the lease cycle when vehicles are being returned to the lot, creating an influx of electrified CPO inventory. As consumers grapple with higher gas prices, used EVs could offer an accessible entry point into EV ownership for shoppers who are open to electrification but intimidated by new vehicle prices.  

Urban Science’s data shows that during a six-month period from October 2025 to March 2026, former BEV buyers who returned to market were nine times more likely to purchase a BEV as former ICE buyers. Former PHEV buyers were also more than four times as likely to purchase a BEV than former ICE buyers. As the industry recalibrates its EV future, current EV owners are emerging as the most reliable source of future EV demand, underscoring the importance of retention, trade-cycle marketing and ownership experience. 

For OEMs and dealers, these trends represent both opportunities to pursue and developments to monitor closely. New models entering the market point to continued momentum, while factors like gas prices, state incentives, affordability concerns and CPO inventory could all influence where demand gains traction. To capitalize, an OEM and its dealers need to look past surface-level indicators and ground their decisions in real sales and sustainment signals. For instance, MarketView’s charging station analysis can help pinpoint where sales potential is supported by accessible charging, making adoption more likely to endure. 

The Truth in the Data

Urban Science’s market analysis clearly shows EVs remain relevant in the U.S. Demand may be more concentrated than it once was, but consumers across the nation are still embracing alternative powertrains in significant numbers.  
As the conversation around EVs continues to shift, it can be easy to lose sight of market realities. But the truth is in the data. For an OEM looking to stay aligned with actual demand, rather than prevailing industry narratives, the competitive advantage will come from embracing an unbiased view of market dynamics and using it to inform EV planning, distribution and retail execution. 

Explore how Urban Science’s MarketView EV Dashboard can help your brand analyze and anticipate demand for alternative powertrains.  

* “Electric vehicles” comprise all major electric powertrains (PHEV, BEV, HEV). 

Summary

Demand for alternative powertrains remains present as the U.S. EV market finds its footing following the rollback of federal tax credits. However, consumer appetite is increasingly fragmented and localized. To succeed in the next phase of EV adoption, each OEM and dealership will need to use daily industry sales data to identify pockets of opportunity and align inventory, marketing and sales strategies with demand. 

FAQ

• How are U.S. EV sales performing after the end of federal tax credits? Following the rollback of U.S. federal tax credits for EVs in 2025, consumer appetite for battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hybrids remains present. However, demand has become increasingly fragmented and market-specific, making reliable, daily industry sales data an essential tool for automakers and their dealers. 
• Why do EV sales trends in the U.S. vary from state to state? EV sales trends in the U.S. vary from state to state because incentives, gas prices, charging access and consumer preferences differ across markets. Many states continue to offer rebates, tax deductions and special programs designed to offset the costs of purchasing an EV, along with installing home chargers. In states with higher gas prices, alternative powertrains may be especially appealing to consumers. To stay aligned with local market conditions, OEMs need access to state-level demand and forecasting data so they can identify pockets of opportunity and adjust their inventory, marketing and sales strategies accordingly.
• Are U.S. consumers still buying battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hybrids? 
  U.S. consumers are still buying BEVs, PHEVs and hybrids in significant numbers. Urban Science’s analysis of month-to-month vehicle sales found BEV sales outperformed the broader retail market on a year-over-year basis in April 2026 and increased overall share. In some states, including Texas, sales of BEVs and hybrids increased in April 2026, while sales of internal combustion engine (ICE) vehicles declined.
• Are certified pre-owned EVs a growth opportunity for dealers? CPO vehicles are emerging as a significant growth opportunity for dealers as more leased EVs return to lots. For consumers who are open to electrification but hesitant to pay new vehicle prices, CPOs can provide an accessible point of entry to EV ownership.
• What role do gas prices play in EV and hybrid demand? High gas prices can make EVs and hybrids more appealing by encouraging consumers to compare the cost of fueling an internal combustion engine (ICE) vehicle with the potential savings of an alternative powertrain. In states like California, where drivers face some of the country’s highest prices at the pump, EVs and hybrids may look especially attractive. 
• How can automakers and dealers identify and respond to EV sales opportunities? An OEMs and its dealers can identify and act on EV sales opportunities by tracking demand across powertrains, fuel types and geographies. Urban Science’s MarketView™ EV Dashboard equips OEMs with the science-driven, sales-based signals they need to locate high-potential markets and adjust inventory, sales and marketing strategies in response.