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European drivers are escaping high gas prices and buying more cheap Chinese EVs. In the U.S., that’s impossible.
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As the war in Iran spikes gasoline prices around the globe, drivers in many countries have headed for an obvious emergency exit: EVs. But buyers in the U.S. aren’t following suit, and a lack of affordable EV options is a big reason why.
While global EV sales plunged in January and February from 2025’s record heights, they rebounded in March and April, according to data out this week from Benchmark Mineral Intelligence. That’s largely thanks to a surge in Europe, where EV sales were 27% higher this April than the same month last year. Rising gasoline prices fueled the region’s market, BMI says, as did the increasing availability of cheap Chinese EV imports.
The latter is exactly what the U.S. lacks. While used EVs are now cost-competitive with used gas cars, that’s not the case for new models. The cheapest new EV sold in the U.S., the Nissan Leaf, starts at just under $30,000. But in China, dozens of EVs retail for around $25,000 or less, including several models from BYD, which surpassed Tesla as the world’s top EV seller earlier this year. And while the Asian superpower has ramped up exports to Europe, Latin America, and, more recently, Canada, its cars face a 100% tariff and national security rules in the U.S. that make them impossible to sell.
It’s not that U.S. drivers aren’t interested in electrifying their ride. Shopping sites Cars.com and CarGurus both say searches for EVs have jumped since the Iran war began. And a February survey from Cox Automotive found nearly half of Americans considering an EV would pick the Chinese-made Geely Xingyuan over a Tesla Model Y, while 38% would select BYD’s Seagull over the Tesla.
But letting Chinese EVs into the U.S. is a scary prospect for domestic automakers. The American EV sector is only just finding its sea legs, having been knocked back time and time again by tariffs, politics, and the federal tax credit rollback. It’s probably not reassuring that President Donald Trump has said he’s open to Chinese investment in the U.S., provided companies use American labor — and that Trump’s meetings this week with Chinese President Xi Jinping similarly indicated a softening in relations.
“[U.S. automakers are] absolutely more than worried — they’re scared stiff,” Michael Dunne, chief executive officer of automotive consultancy Dunne Insights, told Politico. “Imagine if the Chinese come in with a $25,000 EV. That could catch like wildfire.”
For now, though, BYD in the USA remains miles down the road — if it’s a destination we ever reach at all.
On wind and solar, Interior won’t go down without a fight
Interior Secretary Doug Burgum on Wednesday affirmed that the Trump administration will appeal a ruling that struck down Interior Department policies stymieing wind and solar permitting.
Last month, a federal judge ordered the administration to stop enforcing five actions that effectively blocked all wind and solar energy permitting on public land, including a policy that required Burgum to personally sign off on projects that need federal permissions. The blockade was “arbitrary and capricious,” the judge said, especially considering permitting for fossil fuel companies marched on as usual.
Congress has been trying for years to enact bipartisan legislation to reform energy permitting, but Trump’s anti-renewables crusade has led Democrats to repeatedly back out. This appeal is likely to derail reform attempts once again, as two senators said last month they’d cooperate only if the Interior Department lets solar and wind projects keep rolling.
Geothermal innovation keeps heating up
This week marked a milestone for the geothermal industry — a potentially key piece of the push to secure clean, 24/7 power.
On Wednesday, Fervo Energy became the first next-generation geothermal company to go public, bringing in $1.9 billion from its IPO and securing a valuation of about $7.7 billion, Canary Media’s Dan McCarthy reports. While traditional geothermal energy production has been limited to certain geologic areas, like volcanic regions, Fervo is borrowing drilling techniques from the fossil fuel industry to access deep-down heat in more locations.
Another thing geothermal may be able to borrow from oil and gas drillers? Their abandoned wells. The U.S. is littered with these sites, many of which have no clear owner and are polluting the air and groundwater, Canary’s Maria Gallucci reports. A growing number of both Republican- and Democratic-led states are exploring whether these wells could be repurposed for geothermal energy production — a complicated task with huge potential upside.
Fossil fuels all the way down: In rural Jasper County, Indiana, residents are fighting to shut down a 50-year-old coal plant running past its prime, while also staring down another polluting prospect: a new gas plant to power a data center. (Canary Media)
Tapping the brakes: President Donald Trump says he supports suspending the federal gas tax, though even Republicans in Congress are reluctant to move on his call to action. (Politico)
Clean power climbs: A new dashboard that tracks national and state-level progress on deploying clean energy finds that the U.S. produced nearly three times as much solar, wind, and geothermal power in 2025 as it did in 2016. (Environment America, news release)
Generating controversy: Elon Musk–led company xAI has installed dozens of “temporary-mobile” gas turbines in Mississippi to power its data centers, which remain exempt from state oversight even as neighboring residents push back over pollution and noise concerns. (Mississippi Today)
Inside offshore wind communities: After months spent interviewing residents in three offshore wind hubs in Connecticut, Maryland, and Massachusetts, researchers find that communities are excited by the projects’ economic promise but are unsure it’ll last once construction is finished. (NBC Connecticut)
Georgia’s nuclear warning: Utility customers are still paying the cost of Georgia Power’s addition of nuclear reactors to Plant Vogtle, which ran seven years behind schedule and more than two and a half times over budget, providing a cautionary tale for advocates of the energy source. (Inside Climate News)
Mercury rising: Coal power plants released 9% more mercury in 2025 than they did a year earlier — a number that will likely grow as the Trump administration looks to expand coal power generation and loosen regulations that could curb the toxic pollutant. (New York Times)
Thanks to state incentives, the long-range, lower-cost electric trucks are affordable. Widespread adoption could help California meet clean-trucking targets.
Back in 2017, Tesla promised to bring an all-electric semitruck to market that would have a longer range and lower cost than its competitors. Then, the trucking industry waited — and waited. The initial production target of 2019 came and went, as did each newly announced date over the next three years.
But in 2022, Tesla finally unveiled its Tesla Semi and started to get pilot versions on the road for testing. The Class 8 battery-electric truck hit performance targets well beyond what Daimler, Volvo, Kenworth, Peterbilt, and other companies were delivering with their all-electric models. As of April 29, Tesla says it has finally started high-volume Semi production at its factory in Sparks, Nevada.
Now, the Semi’s combination of mileage and price appears set to transform an industry hungry for an affordable way to move freight without burning diesel — especially in California, the country’s top market for electric trucks.
So says Ray Minjares, heavy-duty vehicles program director at the International Council on Clean Transportation. The nonprofit research group has been tracking applications from truck purchasers seeking vouchers under California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), the country’s biggest state-administered program to incentivize the shift to heavy-duty clean vehicles.
Of the 1,067 requests for vouchers submitted during the latest application window, which launched in December 2025, 965 were for Tesla Semis, he said. That’s far more applications than for any other model of truck, he added — and more than the total number of HVIP applications for all heavy-duty trucks since 2021.
And if all those Tesla Semis are actually delivered by the end of this year, that could make up about a third of heavy-duty truck sales in the state, Minjares said. That’s far above the 10% target for zero-emissions Class 8 vehicles set under California’s Advanced Clean Trucks regulation, he noted.
This would be an important environmental accomplishment. Heavy-duty trucks emit more than half the transportation sector’s harmful air pollution, with disproportionate health impacts for lower-income areas and communities of color.
It would be even more striking given that the Republicans in Congress passed legislation last year nullifying California’s power to set its own emissions reduction standards for trucks and cars under the federal Clean Air Act, he said. The Trump administration has also moved to weaken national fuel economy standards and claw back federal funds for electric trucks and EV charging.
Considering the policy headwinds, “states that have severe air quality challenges and climate goals need to find alternative pathways to enable this transition,” Minjares said. And one of the most important ways to do that is “putting downward pressure on the price that fleets are paying for the vehicles.”
The median price for a Tesla Semi capable of driving about 500 miles on a single charge is just under $300,000, according to HVIP data. That’s about $138,000 to $224,000 less than competing Class 8 battery-electric vehicles with roughly half the range, he said.
And while Tesla has tested the patience of buyers with its delays, the early models it put on the road got high marks from trucking companies and drivers.
In 2023, during three weeks of test-drives hosted by the nonprofit research group North American Council for Freight Efficiency (NACFE), Tesla Semis that beverage giant PepsiCo tried out hit 384 miles on a single charge. One truck traveled 1,076 miles in a single 24-hour period with multiple partial recharges using Tesla’s 750-kilowatt Supercharger. In another NACFE test-drive in 2025, a Tesla Semi operated by freight company Saia consistently traveled 465 miles on a single charge while operating two shifts per day, said Mike Roeth, NACFE’s executive director.
As of today, Tesla has boosted the range of its Semi to up to 350 miles for the standard model and up to 500 miles for the long-range model. It has also launched its Megacharger, capable of delivering up to 1.2 megawatts of power — enough to replenish about 60% of a Semi battery in 30 minutes — available both for truck depots and at an expanding set of public charging sites.
“The Tesla Semi is twice the range, and half the charging time, of trucks from traditional manufacturers,” Roeth said. “And early data is showing it’s a third less expensive to purchase.”
These are all appealing characteristics to Jennie Abarca, founder and CEO of King Fio Trucking in Long Beach, California. She already has 11 electric trucks in her 35-truck fleet serving the ports of Long Beach and Los Angeles, including models from Volvo, a major manufacturer, and Nikola, a startup that went bankrupt last year.
“Both trucks have been exceptional,” she said. “But now you have something like the Tesla coming in: 500-mile range, 30-minute recharge, and $150,000 less than the current option out there — wow.”
Abarca has applied to secure HVIP vouchers for 20 Tesla Semis, with each voucher providing a $120,000 discount to the up-front cost of a truck. Additional incentives available from the ports of Long Beach and Los Angeles and from utility Southern California Edison for drayage trucks, which carry cargo from ports to inland warehouses, can further reduce that cost by up to 90%.
Buyers must still pay sales and excise taxes on the full sticker price of the vehicle and cover registration fees. But with the full stack of incentives, the cost of a Tesla Semi “will look more like a really nice used diesel [truck], which is what I would normally buy,” Abarca said.
And once it’s on the road, an electric truck is less expensive to fuel and maintain, she said. These operating advantages, along with lowered electric drivetrain and battery costs, are expected to bring electric trucks into parity with diesel vehicles in terms of total cost of ownership within the next five to 10 years, according to research from the International Council on Clean Transportation, NACFE, and other groups.
To be clear, “I can’t buy these trucks without incentives,” Abarca said. “The trucking industry has been in a hole since the end of 2022” due to the supply chain disruptions and inflationary pressures of the Covid pandemic, she said. “And I don’t have investors. I only have the profits I make from my business.”
Rudy Diaz, owner of Long Beach–based trucking firm Hight Logistics, also said he wouldn’t have been able to buy the 25 electric trucks in his 75-vehicle fleet without incentives.
But he believes that electric vehicles are the future of the industry — if they can come down in price and weight and their range can be increased between charges. That’s why he’s applied for HVIP vouchers for 15 Tesla Semis and plans to install several Megachargers at his Long Beach depot.
The Volvo and BYD trucks he now operates are capable of making it from ports to the complex of distribution warehouses in the Inland Empire region of Southern California and back on a single charge, “and not necessarily run out of battery,” he said. “But to do that, you’re going to have to have downtime for charging.”
With the Tesla Semi’s 500 miles of range, he notes, “I can go to San Diego and back. I can be competitive with diesel in other areas where I couldn’t compete before.”
Such flexibility is what could make the Tesla Semi launch “the kind of thing that truly catalyzes change,” said John Verdon, co-founder and chief commercial officer of Nevoya, a startup that owns and deploys electric trucks carrying freight in California, Arizona, and Texas for large corporations and third-party logistics operators.
Nevoya has been operating five preproduction Tesla Semis in California as part of its fleet of about 50 electric trucks, Verdon said. Most of the company’s routes are between the ports of LA and Long Beach and the Inland Empire. But its Tesla trucks are able to make longer runs from Southern California to the Central Valley and San Francisco Bay Area, he said.
Extended range isn’t just about longer hauls, though, he said — it’s about getting the most value out of vehicles whose higher up-front costs can be more than counterbalanced by lower operating costs, as long as they’re being used as often as possible. “We’re no longer bound by the notion that we have a vehicle that’s superexpensive, has limited range, and inadequate spots for them to charge.”
It’s too soon to tell how the Tesla Semi might push its competitors to improve the range or pricing of their electric trucks. But as Minjares noted, legacy truck manufacturers face a structural challenge in competing against their all-electric rival, with relatively low volumes of electric vehicles being built on production lines designed to support both internal combustion and battery-electric models.
“Legacy manufacturers are stuck between multiple technologies, weighing them down with development and production costs,” he said. “But Tesla has bet on one technology, giving the company greater focus and discipline.”
Whether the trucking industry has the buying appetite to make that bet pay off is another question. Roeth noted that Tesla has stated its Nevada factory is capable of producing about 50,000 Semis per year. For context, there are only about 2,000 electric heavy-duty trucks on U.S. roads today, according to International Council on Clean Transportation data. In fact, 50,000 vehicles would constitute roughly a quarter of the total annual U.S. market for heavy-duty diesel-fueled trucks.
“Tesla has two things it has to do: Convince customers to buy electric, and convince customers to buy its electric,” Roeth said.
While the Tesla Semi has already established its clear performance and price advantages, it has yet to demonstrate the “reliability and durability” of its technology “at 500,000 miles, at 750,000 miles, at 1 million miles,” he said.
Tesla won’t hit its full Semi production capacity right away, according to Minjares. It’s also likely to seek out markets outside the U.S. It will face tough competition from leading Chinese electric vehicle manufacturers that now dominate the industry, as well as new entrants like Windrose, which last month sold its first electric truck in the U.S. at a price comparable to the Tesla Semi’s.
But Minjares believes these kinds of competitive pressures are what’s needed to make other manufacturers stop fighting state clean-trucking policies and start embracing innovation.
“This transition was never going to be sustainable if the underlying economics were not favorable,” he said. “The challenge on the policy side has brought that into clearer focus.”
When it comes to electric vehicles, old is gold.
In the U.S., sales of new EVs are slumping — but more used EVs are being driven off the lot than ever, per Cox Automotive data. With hundreds of thousands of battery-powered vehicles coming off leases soon, the used EV market is set to accelerate even further in the years to come.
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Although Americans still buy a lot more new EVs than used ones, the Cox data shows the gap beginning to close: Used EV sales jumped by 34% in 2025, compared with the prior year, as new EV sales shrank a bit. Overall, electric models made up nearly a tenth of new vehicle sales in the U.S. in 2025, and about 2% of used car sales.
A combination of factors explains why used EVs are on the upswing while new ones are stagnant.
For one, a lot more used EVs are on the market these days than in the past. About 300,000 EVs will come off of leases this year, up from 123,000 last year, and Cox expects another 600,000 to do so in 2027. Not all of those will hit the used car market, but many will, providing a rush of inventory that helps drive down prices.
Speaking of prices, on average a used EV is now basically at price parity with a used gas car. That’s a big deal: Up-front cost is one of the main barriers preventing people from buying battery-powered vehicles, which are typically cheaper to drive and maintain but have long been more expensive than similar gas-fueled models.
A new EV is still about $6,500 more than a new gas car, on average. Consumers used to be able to shave $7,500 off the EV price with a federal tax credit, but the Trump administration did away with that incentive in September.
The rise of used EVs is a rare positive signal for the American vehicle-electrification effort.
While new EV sales hit record highs under the pro-EV Biden administration, adoption was slower than expected, causing some automakers to walk back commitments to churn out electric models. When President Donald Trump took office last year and tossed out the tax credit along with a bunch of other supportive regulations, it added fuel to the fire.
Some analysts expect EV sales to surge as fallout from the war in the Middle East spikes oil and gas prices worldwide. In the U.S., the average cost of a gallon of gas is now well over $4 a gallon — and climbing — and in some countries, fuel shortages have spurred driving bans and fuel rationing. So far, the early evidence suggests that those expecting an EV boom are on to something.
As of January, California requires developers of new multifamily buildings to ensure that residents with parking have access to EV charging at home. It’s one of the most equitable EV-charging policies in the nation, according to climate advocates.
But in a bid to reduce costs for builders, a state lawmaker introduced a bill in February that would waive those requirements for affordable housing construction until at least 2036.
Most households don’t have EVs yet, but the vehicles are growing in popularity, their costs are falling, and local rebates are making them more affordable. Clean-driving proponents say the current state policy, which requires outlets for EVs to plug into, is crucial to ensure that residents of affordable housing units can easily transition to electric cars and reap the benefits.
“California shouldn’t drop back,” said Linda Hutchins-Knowles, co-leader of the nonprofit National Charging Access Coalition. “We have the most expensive cost of living in the country. We need to reduce costs for residents of apartments and condos, especially in affordable housing, by giving them access to the lowest-cost charging for the lowest-cost vehicles, which are used EVs.”
In California, where gas is nearly $6 a gallon, EVs are taking off. They made up nearly one-fifth of new cars sold in the last quarter of 2025. Even given the state’s high electricity prices, EVs can cut the cost of driving in half. And drivers benefit most when they can charge at home: It’s both more convenient and cheaper than using public chargers.
Now, affordable housing developers must install one EV-charging outlet per residence with parking that can provide low-power Level 2 EV charging (20 amps, 240 volts). These outlets deliver a charging speed that’s in between what you’d get from a full Level 2 charging outlet (40 amps, 240 volts) and a standard 120-volt outlet.
Assembly Bill 2748, sponsored by Democratic Assembly Member Sharon Quirk-Silva, would instead allow developers to follow the weaker 2022 building code, which doesn’t require any EV-charging infrastructure for up to 60% of parking spaces. Quirk-Silva did not respond to multiple requests for comment on the bill, which will be heard in committee on April 22.
The state has required new single-family homes, duplexes, and town houses to be built with an outlet for EV charging since the 2016 code. The latest code update “finally extended that courtesy to people who live in apartments,” said Sean Armstrong, managing principal of Redwood Energy, a design firm specializing in net-zero, all-electric affordable housing development.
If passed, AB 2748 could affect millions of Californians who move into affordable housing units constructed in the next decade. By 2030 alone, the state aims to build an additional 1 million units for low-income households.
The California Council for Affordable Housing, an industry trade group that supports waiving the EV-charging requirement, says the bill is necessary to ease economic pressure on developers. “Without this exemption, affordable housing projects, already operating within razor‑thin financial margins, would face substantial and unnecessary cost burdens,” the group wrote in a Feb. 25 post.
The EV-charging requirement does increase project costs — by about $1,000 to $2,500 per unit, said Armstrong, who has consulted on hundreds of housing projects. But these expenses add just 0.2% to 0.5% to the total project cost, he noted.
Adding EV-charging outlets after construction is challenging, as it requires digging up concrete, trenching, laying down conduit, and other changes, Hutchins-Knowles said. Plus, retrofits can be several times the cost of up-front installations, according to Peninsula Clean Energy, a public power agency in the San Francisco Bay Area.
The new bill is the latest example of the brewing tension between California’s pro-electrification building standards and its efforts to ease the housing crisis.
Last June, lawmakers passed a housing reform law meant to spur supply. As part of that policy, the state will skip the 2028 building code cycle, ceding the chance to push developers further toward fossil fuel–free buildings. Some legislators said the move would make housing more affordable. But climate advocates said there’s little evidence to back up that claim.
Debate over what services to install in low-income buildings stretches back even further.
Until the mid-1900s, building developers across the country often constructed housing without complete plumbing, including running hot water. People living in these cold-water flats had to heat water on wood- and coal-burning stoves for bathing, cooking, and cleaning. But cities and states eventually decided that hot water was a basic necessity, not a luxury only wealthier homes should have.
“It was a deep inequity that was fixed by building codes,” Hutchins-Knowles said. “No one argues that to make affordable housing less expensive, we should exempt them from providing hot water.”
“Everyone deserves charging at their house,” said Marc Geller, board member of EV-advocacy organization Plug In America.
Hutchins-Knowles predicts that higher gas prices will drive a surge of interest in EVs. As in the past, legislators need to take the long view for low-income renters, she said. “We shouldn’t block out the people who can least afford to pay more for transportation.”
Chad Shepard has warm feelings about the all-electric Honda Prologue he bought recently. Unlike his first EV, a BMW i3, the SUV is big enough for his two teenage sons and his 80-pound sheepdog. Its 300-mile range is plenty to get him to the homes across the San Francisco Bay Area that he appraises for a living.
And while he hasn’t done the math since he bought it last autumn, he’s pretty certain that he’s saving money on fuel, compared with when he was driving a gas-powered car.
But perhaps the best thing about his new EV is the price he paid: $30,000, well below the sticker price for a new model. “And because it was only a year old, I still had a full 100,000-mile warranty,” he said, which included coverage for its most valuable component — the battery.
Across the U.S., people like Shepard are finding that used EVs are more attractively priced than ever — and are snapping the cars up as a result. It’s a welcome development in what has otherwise been a tough year for an industry that’s key to combatting climate change.
With the oil shock created by the war in Iran, used EVs are likely to become even more attractive to shoppers. Nationally, gas prices have surged to over $4 per gallon on average; in California, the country’s EV capital, they’re nearing $6. Unlike new EVs, used versions have mostly reached priced parity with gas-powered cars, according to new data from Cox Automotive — making the preowned versions the cheapest way for people to ditch increasingly costly-to-fuel gas cars in the near term.
“Affordability is top of mind among Americans, particularly given gas prices today,” said Maximilian Quertermous, co-founder and chief operating officer of Ever, an automotive retail startup focused on electric vehicles. “It’s a great time to buy a used EV overall.”
Used EV sales are climbing even as new EVs sales plummet nationwide.
New EV sales dropped by 28% year over year in the first quarter of 2026, per Cox. That was primarily driven by the loss of federal tax credits under the megabill passed by Republicans in Congress last year.
By contrast, used EV sales increased by 12% over the same period. The reason? Declining prices. The average cost of a used EV is now within about $1,300 of a comparable gas vehicle, Stephanie Valdez Streaty, director of industry insights at Cox Automotive, said during a March forecast call. “That affordability shift has clearly shown up in the data,” she said, “significantly expanding access for mainstream buyers.”
In the U.S., new EVs still outsell used ones. That’s likely to change as the market matures, since the overall used car market is roughly three times as large as the new car market. Right now, EVs make up only about 2% of the used car market, but that share is growing, according to Cox data.
“The trajectory is what stands out,” Valdez Streaty said, “supported by a broader mix of models, more affordable prices, and a significant wave of off-lease EVs.”
These latest data points aren’t coming out of left field, said Scott Case, CEO of Recurrent, a data-science firm specializing in collecting information on used EVs. His company tracked a 35% increase in used EV sales from 2024 to 2025, as well as a consistent downward trend in pricing, with 56% of used EVs selling for $30,000 or less as of January.
“What is different about 2026 is that for the first time ever, there’s actually a big enough used electrical vehicle market,” he said.
In particular, a lot of those used EVs are coming off leases made popular by a “leasing loophole” that allowed automakers and dealers to offer a full $7,500 federal tax credit, without the income qualification and manufacturer restrictions that applied to claiming the credit on direct sales.
More than 1.1 million EVs were leased from January 2023 to September 2025, when the federal tax credit ended. Shepard said he kept a close eye on those trends when planning to buy a bigger EV. “If you track that, you’ll see that [the cars] all go back to the dealer at the same time,” he said. “They have a flood of them, and the price drops a lot.”
And the latest vintages of used EVs offer an impressive value when compared with their gas-powered equivalents, Case said. Recurrent’s latest data indicates that a used EV is a year newer and has nearly 30,000 fewer miles than a similarly priced used gas car.
“When you compare what you’re getting for each of those, this is not an apples to apples — it’s a crappy apple versus a really awesome apple,” he said.
At least 68% of used EVs that Recurrent is tracking are 2022 models or later, which offer newer technology features than the average 6.5-year-old used internal combustion engine vehicle, Case added. Almost all those newer EVs remain under battery and powertrain warranties that tend to offer eight years or 100,000 miles of coverage, he said — and that’s for a class of vehicle that already costs about 40% less to maintain than a conventional car.
If they’re so much better, why are used EVs so cheap? Case outlined several key factors to explain that.
First is the far more rapid pace of improvements from one model year to the next — “more range, faster charging, more technology” — that make newer EVs more valuable than their predecessors. EVs that are even a few years old are seen as less desirable than the latest models, and thus command a lower price, he said. Federal tax credits also pushed down the expectations of what EV should cost, he said.
But many people remain uncertain about buying an EV, Case said. Range anxiety remains one of the chief concerns, he noted. And for used EVs, there’s another layer of uncertainty around “how the battery is holding up.”
Recurrent hopes its research can help disabuse EV buyers of that uncertainty, he said. The company has collected data from more than 50,000 EVs on the road, with more than a billion miles driven. While there’s variability between different manufacturers and EV models, that data shows that used EV batteries are holding up better than expected, he said. That finding is backed by other studies indicating that EV batteries are lasting longer than people thought they would.
These are important factors for low-income customers looking to EVs to cushion themselves from rising fuel costs, said Jason Zimbler, senior director of light-duty vehicles at clean-transportation nonprofit Calstart. “You’re getting a younger car, less road wear, and the battery degradation has been minimal,” he said. “So you’re not putting lemons in the hands of the secondary market.”
And while last year’s Republican-passed megabill killed a $4,000 tax credit for used EVs, along with the bigger rebate for new ones, many buyers can still access state or utility rebates, said Peter Glenn, co-CEO of EV Life, a startup with software used by customers, car dealers, and automakers to find EV incentives.
California’s biggest utilities offer rebates ranging from $1,000 to over $4,000 for income-qualified customers. States including Connecticut, Delaware, Illinois, Massachusetts, New Mexico, New York, and Rhode Island provide rebates in the thousands of dollars range, he said.
Understanding all the price reductions available up front can push used EVs past price parity with gas-powered cars and into the “tipping point” of being cheaper, Glenn said. “You almost need it to tip into obvious savings beyond, so it becomes a total no-brainer.”
Of course, buyers focused on long-term ownership costs can also use a variety of calculators available online that demonstrate how much cheaper it is to fuel and maintain EVs over time, Glenn added. “If you’re charging at home, it can be the equivalent of paying about $1 to $2 per gallon, even in higher-electricity-cost markets.”
Shepard only recently installed a Level 2 charger at home, so he hasn’t had a chance to calculate his fueling savings yet. But he’s glad he doesn’t have to rely on gasoline anymore.
“I just don’t see any need to use fossil fuels to make our cars go when it works just as well with electricity,” he said.
This article originally appeared on Inside Climate News, a nonprofit, nonpartisan news organization that covers climate, energy, and the environment. Sign up for their newsletter here.
In the 2021 Bipartisan Infrastructure Law, Congress voted to invest $5 billion in accelerating a phaseout of diesel school buses across the country, a move meant to protect students from harmful pollution and reduce greenhouse gas emissions.
But the Clean School Bus program has been on hold since President Donald Trump took office, with $2.3 billion still unspent.
Last Thursday, the Environmental Protection Agency announced what it called a “revamp” of the program, signaling it would no longer favor electric school buses, where 95 percent of the money had been spent under President Joe Biden. Instead, the Trump administration is seeking to move to “a broad range of options,” including buses fueled by natural gas, biofuel, or hydrogen.
Such a shift could lock grant recipients into investments in school buses that generate significant climate pollution for years, but EPA Administrator Lee Zeldin said it is designed to provide school districts with increased choice and more affordable options.
“The Clean School Bus program has been a disaster of poor management and wasteful spending of taxpayer dollars,” Zeldin said in a statement. “Today, EPA takes the next step to set the program straight. Americans can rest assured that moving forward, the program will be safe, effective, and use reliable forms of American energy.”
In announcing the changes, the EPA noted that the law has always allowed for a wider range of fuel options than electric school buses. Indeed, the law specifies that money can be used for “alternative fuel” vehicles, defined as “liquefied natural gas, compressed natural gas, hydrogen, propane, or biofuels,” as long as the EPA administrator certifies it will reduce emissions.
But the law does contain a provision requiring that at least 50 percent of the Clean School Bus funding be allocated each fiscal year for “zero-emission school buses.” In the U.S. market, experts say that means battery-electric buses.
“It appears that EPA may be trying to stretch the definition of ‘clean’ school buses to include more buses that run on highly polluting fossil fuels,” said Melody Reis, federal policy director at the advocacy group Moms Clean Air Task Force, in an email. “But the agency is still required to award at least 50 percent of funds to electric school buses.”
The EPA announcement was critical of electric buses, asserting that under Biden, the Clean School Bus program “forced unsafe and unreliable electric buses onto American schools.” It cited the example of Quebec’s Lion Electric, which filed for bankruptcy in 2024 after selling a reported 3,400 buses in the United States. The company’s new investors announced last year that they would not honor warranties on those vehicles.
But other bus companies with electric school bus lines have expressed a continued commitment to the market over the past year, including Blue Bird Corp., headquartered in Macon, Georgia, and Thomas Built Buses, a subsidiary of Daimler Truck North America LLC, which manufactures its vehicles in High Point, North Carolina.
Critics of the Trump administration see the planned changes to the Clean School Bus program as in line with its other moves to halt the U.S. transition away from fossil fuels, especially the EPA’s repeal of the endangerment finding on greenhouse gas emissions one week earlier.
“Once again, EPA is clearly demonstrating that it plans to fund fossil fuels and prioritize polluting corporate interests over our children’s health and our future,” said Katherine García, director of the Sierra Club’s Clean Transportation for All program, in an email. “Considering we have the funding, technology, and charging infrastructure to deploy electric school buses, no child should have to inhale carcinogenic pollution each day on their way to school. Sacrificing young lungs and futures to prop up corporate polluters is indefensible.”
The majority of the nation’s 500,000 school buses are diesel-powered, and an EPA study released just prior to passage of the infrastructure law estimated that 40 percent of the fleet had been in circulation for more than 11 years. Unlike many other diesel vehicles — trucks that haul loads on highways or tractors that plow farm fields — diesel school buses traverse residential areas daily, exposing residents to high levels of particulate matter and other pollutants. Studies have shown a significant reduction in respiratory illness when school bus diesel emissions are eliminated.
But switching to electric buses has been a difficult decision to make for chronically cash-strapped public school systems. A 2024 report in Resources for the Future’s magazine put the average price of an electric school bus at $352,000, or three and a half times the price of diesel buses, which typically cost less than $100,000. Although electric buses have lower maintenance and fueling costs for school districts, those savings typically have not been enough to offset the higher up-front cost of electric school buses unless they are subsidized.
The Clean School Bus program was meant to help school districts overcome the cost hurdle. And by increasing the number of electric buses purchased, the program was designed to drive the kind of investment in manufacturing facilities and supply chains that would lower the cost of the zero-emission vehicles over time.
The revamped Clean School Bus program Zeldin outlined would be far less ambitious. It still could reduce local air pollution significantly, depending on what type of buses districts purchase. But it is likely to offer only modest reductions in greenhouse gas emissions, and would not aim for the kind of industrial transformation the Biden plan was seeking.
For example, switching to natural gas buses instead of electric would mean lower up-front cost for school districts (and less need for federal subsidy money); they sell for $25,000 to $50,000 more than diesel buses, according to federal studies. Districts would have to invest in fueling stations, as they would need to set up charging stations for electric buses. The cost of fueling with compressed natural gas is currently 20 percent less than diesel. School districts also could reduce local pollution with natural gas buses, which generate up to 90 percent less particulate matter than diesel. Smog-forming NOx pollution could be 50 to 90 percent lower if the buses are equipped with low-NOx engines. But carbon emissions would only be up to 20 percent less than the greenhouse gas pollution from diesel buses.
Electric buses generate less than half the carbon emissions of natural gas buses, according to an analysis by the Union of Concerned Scientists that took into account climate pollution from the electricity needed to charge the buses. In some parts of the United States, where the electric grid is cleaner, the climate advantages of electric buses are even greater — about 85 percent less carbon emissions than natural gas buses in upstate New York, where the grid relies heavily on hydropower, nuclear power, and wind energy.
Because buses are a large capital spending item for school districts, the carbon emissions of newly purchased natural gas bus fleets will be locked in for years, with the help of subsidies from the Clean School Bus program.
“Ultimately, this means more pollution in the air our children breathe,” Reis said.
Under the Biden administration, the Clean School Bus program funded replacement of 8,900 school buses in 1,300 school districts, 95 percent of them zero-emission battery-electric vehicles. The Biden administration made $965 million available when the most recent round of funding opened in fall 2024, doubling the offering of the previous year, when applications far surpassed the money available. Applications closed just before Trump took office in January 2025.
As part of its announcement on retooling the program, the Trump EPA said it would not be awarding any funds under that round. “EPA thanks applicants for their interest and encourages them to apply for the new grant program,” the EPA announcement said.
Reis said the months of limbo have been difficult for school districts and have delayed action on health harms for the 25 million students who ride school buses.
“Demand for clean school buses has been high, and hundreds, if not thousands, of school districts waited for over a year only to recently discover their applications would not be honored,” Reis said. “I can imagine they’re feeling disappointed and distrustful of the current EPA. It also means that thousands of kids who could have been riding electric school buses this school year are still riding the older, polluting buses that are harming our health and the environment.”
Ground zero for the impact of Zeldin’s changes to the Clean School Bus program will be his home state of New York, where Democratic Gov. Kathy Hochul is spearheading implementation of one of the nation’s first electric school bus mandates. Hochul defeated Zeldin when she sought reelection in 2022. The Legislature approved the mandate, proposed by Hochul, as part of the state budget earlier that year.
If EPA awards fewer Clean School Bus program grants for electric buses, that will mean less support for New York school districts, which are supposed to purchase only zero-emission buses by 2027. Prior to Trump’s return to the White House, 45 school districts in New York state, including New York City, received more than $210 million in grants and rebates from EPA’s Clean School Bus program for the purchase of 653 electric school buses, said a spokesperson for the New York State Energy Research and Development Authority, which is administering the transition to electric school buses. About two-thirds of the state’s 730 school districts are participating in electrification plans, according to NYSERDA.
The aim of New York’s program is to transition the state’s entire school bus fleet to electric vehicles by 2035. New York has the nation’s largest school bus fleet, with nearly 50,000 vehicles, or 10 percent of the nationwide fleet. Six other states — California, Connecticut, Delaware, Maine, Maryland, and Washington — also passed electric school bus mandates in the wake of the 2021 infrastructure law. Other states have pilot programs, like Illinois’ effort to test use of electric school bus charging to help increase stability of the grid. All stand to get less federal support than anticipated for that transition with the planned changes to the EPA program.
Hochul has made $500 million available for the state’s electric school bus transition from New York’s $4.2 billion Clean Water, Clean Air, and Green Jobs Environmental Bond Act, enacted at the time of the mandate. “This program can bring the cost of an electric bus close to parity with a diesel bus and can cover up to 100 percent of the cost of charging stations,” a NYSERDA spokesperson said. In addition, the New York Legislature’s 2025–2026 budget included an additional $100 million for zero-emission transportation, including school buses and supporting infrastructure.
But some New York public school leaders have chafed at the state’s mandate and the New York State School Boards Association has called for lawmakers to repeal or significantly alter it — or have the state cover the full cost of the transition. The school boards association has said the anticipated increase in funding from the state falls short of the anticipated increase in costs.
“School board members recognize the perilous effects of a changing climate on students,” the association said in a position paper. “However, they must ensure that the decisions they make on behalf of their communities are financially and operationally sustainable. Unfortunately, as it is currently construed, and because of factors that have changed since its inception, the zero-emission school bus transition for too many districts is neither.”
One of the factors that have changed is the withdrawal of federal support for the transition to EVs under Trump.
As a first step toward implementing its revamped Clean School Bus program, the EPA is opening a 45-day public comment period in order “to seek feedback from fleet operators, manufacturers, school officials, and energy producers on a broad range of fuel options that school bus sectors could use,” the EPA said.
About 22% of light-duty vehicles sold in 2025 in the United States were hybrid, battery electric, or plug-in hybrid vehicles, up from 20% in 2024. Among those categories, hybrid electric vehicles have continued to gain market share while battery electric vehicles and plug-in hybrid vehicles decreased, according to estimates from Omdia. In the second half of 2025, battery electric vehicle sales increased before sharply declining in response to the expiration of tax credits at the end of September.
These different vehicle types affect the broader energy sector in different ways. Battery electric vehicles and plug-in hybrid vehicles can consume electricity from isolated power sources or, more commonly, from the grid. So, their use can affect electricity demand. By comparison, hybrid electric vehicles do not have plugs, so they don’t directly affect grid-delivered electricity demand and were not eligible for any of the federal tax credits that expired in September.
Two tax credits for purchasing or leasing new electric vehicles both expired on September 30, 2025: the New Clean Vehicle Credit and the Qualified Commercial Clean Vehicle Credit. Battery electric vehicle market share reached record highs immediately before the credits expired: 12% of light-duty vehicles sold in September. Battery electric vehicle sales then fell to less than 6% of the market in each of the remaining months of 2025. Last year marked the first year where annual sales and market share of battery electric vehicles declined.
Battery electric vehicle sales in particular are more common in the luxury vehicle market. U.S. luxury vehicles accounted for 14% of the total light-duty vehicle market in 2025, and within luxury sales, battery electric vehicles accounted for 23%. The expiration of the clean vehicle tax credits affected sales of luxury and non-luxury battery electric vehicles in similar ways.
Because sales figures in any year are relatively small compared with the total number of vehicles on the road, electric vehicles’ share of the total light-duty vehicle fleet is much less than the recent 9% sales share (7.5% battery electric vehicles and 1.6% plug-in hybrids). In our Monthly Energy Review, we maintain annual data series on light-duty vehicles, battery electric vehicles, plug-in hybrid vehicles, and hydrogen fuel cell electric vehicles based on data from S&P Global. In 2024, the most recent data year, electric vehicles accounted for 2% of all registered light-duty vehicles in the United States.
Last year brought a torrent of bad news for the U.S. electric vehicle industry. The Trump administration pushed Republicans in Congress to cancel Biden-era EV tax credits and revoke states’ rights to set clean-car mandates. The White House moved to weaken vehicle fuel-economy standards. And it froze billions of dollars in federal EV-charging grants — although legal challenges have since unlocked $5 billion of that money.
Despite the upheaval, U.S. public charging networks had a growth spurt last year, according to a report released today by data analytics firm Paren. And the new chargers are working more reliably and being used more heavily than ever — a sign the country is matching charging supply to demand.
The nation’s public fast-charging network expanded by 30% over the course of 2025, adding 18,041 ports, according to Paren. That’s up from the 13,970 fast-charging ports deployed in 2024, and way up from the 5,313 installed in 2021.
“We’ve got a record number of chargers being deployed by a bunch of new players in the industry, as well as the stalwarts,” said Bill Ferro, Paren’s co-founder and chief technology officer.
Last year’s growth included more charging stations, but also more ports per station, Ferro noted. That’s a sign that charging providers are striving to ensure that EV drivers don’t have to wait too long for a charge when they pull up.
Reliability scores, which Paren measures as the share of charging sessions that are successfully completed, ticked up in 2025 too, averaging 93%. That’s good news for EV drivers who’ve been disappointed by malfunctioning chargers in past years. Ferro credited these incremental improvements both to new infrastructure, “which by default is going to work better,” and improved maintenance and remote diagnostics of malfunctioning chargers.
And utilization rates — a measure of how often a charging port is in use — held steady in most states and even increased slightly in some over the course of 2025. Paren tracked 141 million public charging sessions from January to December, a roughly 30% increase from the previous year.
Paren’s data indicates that charging infrastructure is expanding at a rate that matches up well with demand from a growing number of EV drivers, Ferro said. Maintaining that balance is vital for charging providers, who don’t want to overinvest in charging stations that fail to get enough business to pay themselves off, but also don’t want to leave drivers waiting too long for charging ports to open up.
To date, charging remains in much higher demand in some states than in others. California led the pack on utilization of its fast chargers in 2025, as it has for years, followed by Florida, Hawaii, Maryland, New Jersey, and Nevada. But the fastest growth in utilization occurred in Sunbelt states, including Arizona, Georgia, and Texas.
Importantly, the growth in charging infrastructure was driven almost entirely by private investment rather than by government funding, Ferro said. Tesla, which operates the country’s biggest charging network, continued to lead the pack, with more than 6,700 charging ports deployed in 2025, more than a third of the total. But longtime charging operators, other automakers, and regional players also each added hundreds of charging stations over the course of the year.
This increasing private investment helped counteract the decline in federal funds. In February, the Trump administration tried to cancel the $5 billion National Electric Vehicle Infrastructure program. After setbacks in court, the U.S. Transportation Department reopened the NEVI program in August, allowing states to resume contracting and installing chargers. Last week, a federal judge ruled that the department’s initial suspension of the funding was unlawful.
That program was designed to bolster public charging along highways and other major transit corridors across the country, including places where EV adoption has lagged, undermining the business case for building chargers. But with just over 700 ports installed as of the end of 2025, NEVI projects make up only a small fraction of the country’s total public charging — although they’re important for rural areas where chargers are still hard to find.
Although NEVI dollars are flowing again, the Trump administration hasn’t released the entirety of the federal EV-charging funding it canceled last year. States and environmental advocates have filed lawsuits seeking to force the federal government to unfreeze the $2.5 billion Charging and Fueling Infrastructure grant program for state and local agencies, much of it targeted at expanding charging in rural and lower-income areas.
Meanwhile, the One Big Beautiful Bill Act passed by Republicans in Congress last summer not only ended EV tax credits as of September 2025, but will end tax credits for EV chargers as of July 2026. The law also rescinded hundreds of millions of dollars from the Environmental Protection Agency’s Clean Heavy-Duty Vehicles Program, which was meant to help state and local governments, schools, territories, and tribes purchase zero-emissions trucks and buses and charging equipment.
Even NEVI isn’t out of the woods yet. The draft fiscal year 2026 transportation bill introduced in Congress earlier this month would strip $503 million in unobligated funds from the program, according to the Sierra Club, as well as $300 million earmarked for repair and maintenance of chargers — a potential hit to the network’s reliability.
Looming large over charging providers is the risk that EV adoption may slide precipitously downward. Demand for the vehicles boomed right before federal tax credits expired in September, but sales are now slowing. And major automakers Ford and General Motors have written down billions of dollars of losses on their EV investments.
Still, Paren is forecasting that charger deployments will continue to rise in 2026, albeit at a rate of about 8%, much slower than the breakneck pace set last year. Ferro sees the risks of overbuilding charging infrastructure falling mainly on smaller companies or those overly reliant on federal funding, whose networks could be snapped up by bigger firms.
“I think the industry is going to consolidate and expand at the same time,” he said. “We know the larger players are building out for the future. They’re not looking to 2027 for their goals. They’re looking to 2035.”
In some parts of California, the lead state on electric vehicles, utilities are facing a challenge that will eventually spread nationwide: Local grids are struggling to keep up with the electricity demand as more and more drivers switch to EVs.
The go-to solution for this type of problem among most utilities is to undertake expensive upgrades, paid for by all their customers, so that the grid can accommodate the new load.
But there’s a cheaper option: Utilities could simply make sure that the EVs that plug into their grids aren’t all charging at the same time.
So finds a new report prepared by The Brattle Group, an energy consultancy, on behalf of EnergyHub, a company that operates virtual power plants (VPPs) for more than 170 utilities. In an analysis of 58 EV owners in Washington state, the authors found big cost benefits from “active managed charging,” the process of modulating when and how much EVs charge to minimize their impact on the grid.
It’s a crucial finding, as researchers say the approach is most effective when deployed before lots of EVs show up on utilities’ grids. Previous research has found that the cost of unmanaged charging could add as much as $2,500 per utility customer once EVs reach higher levels of penetration on utility grids. In California, that cost is already impacting utilities’ plans. Other fast-growing EV regions, including New York and Massachusetts, could soon face similar challenges.
Managed charging is a simple concept but not a simple task. To make it work, utilities have to get EV owners to enroll in managed charging programs, which requires convincing them that they won’t be left with a depleted battery when they need to drive somewhere.
Utilities also need to persuade their regulators — and their own internal grid planners — that these charging regimes are reliably relieving the local transformers, feeder lines, and substations that would otherwise be overloaded by too many EVs charging at once. If utilities can’t do that, they’ll wind up having to build new grid infrastructure anyway.
Managed charging isn’t a new idea. Utilities across the country are starting to test such programs operated by EnergyHub, Camus Energy, ev.energy, Kaluza, WeaveGrid, and other companies.
And the benefits of scaling up such programs could be major, said Akhilesh Ramakrishnan, managing energy associate at The Brattle Group. “With active managed charging, you can roughly double the capacity of the grid to host EVs,” he said.
That would help utilities contain the high and rising costs of maintaining and expanding their distribution grids, which now make up the biggest share of rapidly rising U.S. utility rates.
To achieve the savings that this approach promises, “it’s really important that the solution is implemented without damaging customers’ reliance on their cars,” Ramakrishnan said — in other words, making sure “that their cars are charged by when they need them.”
That’s where more sophisticated managed charging comes in, said Freddie Hall, a data scientist at EnergyHub. The company runs managed EV charging pilots for utilities such as Arizona Public Service and Southern Maryland Electric Cooperative, and applied similar techniques to the EV drivers in Washington state analyzed for the new report.
EnergyHub takes pains to forestall the risk of leaving EV owners without the charge they need by the time they need it, Hall said. For example, “we’ve found that some people don’t constantly update their charge-by time settings,” he said, referring to the deadline that each driver sets to have a full battery. So EnergyHub uses drivers’ past charging behaviors to forecast when they typically unplug and to make sure they’re scheduled to be fully charged by that time.
Occasionally, that requires allowing EVs to collectively pull more power from the grid than permitted under the “load limits” that utilities have set for the transformers, distribution feeders, and substations delivering it, he noted. To deal with that, EnergyHub dispatches charging in ways that minimize those overloads: “We spread out that charging to achieve a lower peak over a longer duration.”
EnergyHub’s managed charging doesn’t just limit impacts on the distribution grid, Hall said, but also co-optimizes for when power is cheaper across the grid at large. It targets times when wholesale electricity prices are low — although it will choose to forego that cheaper energy if using it would violate its local load-limit settings.
These techniques require a lot of information, making them harder to implement than time-of-use rates — the most common way that utilities try to limit EV charging loads today.
Those programs typically charge more for power at times when the grid at large is under peak demand stress, usually during late afternoons or early evenings in the summer or early mornings in the winter, and they charge less for power during off-peak times, typically late at night.
But these time-of-use rates can actually cause more grid stress than they resolve, Ramakrishnan said. That’s because they create a secondary “snapback effect” when rates change from expensive to cheap, and everyone’s EV starts charging at once.
“We’re not trying to say that time-of-use is a bad solution in general, or doesn’t work at all,” Ramakrishnan said. “At lower penetrations, there’s value in shifting EV load to move away from the time that other loads peak. But fairly quickly — when you get to 7% to 10% penetration — EVs themselves start to set the peak.”
That’s one reason why the report recommends that utilities start working on active managed charging programs before EV purchases start to overwhelm the grid. The other reason is to match the pace of how utilities plan ahead for grid investments, Hall said.
“I worked at two utilities before coming to EnergyHub. Grid planning is a multiyear-type deal,” he said. “Getting infrastructure for the distribution grid takes up to 18 or more months. Solutions like these help utilities put off some decisions for up to 10 years, if not more.”
The ability to push out grid upgrades is particularly valuable at a time when power demands are growing even as utilities are under pressure to contain costs, Ramakrishnan said. “A lot of utilities are capital constrained right now.”
At the same time, EVs represent a massive opportunity for utilities to increase electricity sales — and that could put downward pressure on the rates that all customers have to pay. That’s because regulators set those rates based on how much money utilities need to earn to cover their costs. More sales divided by fewer costs means lower rates over the long run.
At the very least, managed charging can better align EVs’ costs with their benefits, Ramakrishnan said. “One, you push the upgrade out and can save money for longer,” he said. “Two, the upgrade gets pushed out to when there are more EVs — that means there are more EVs paying for it.”
This commentary represents the research and views of the authors. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. This commentary was funded through a gift from G. Leonard Baker, Jr. More information is available at Our Partners.
As the United States and Europe navigate a difficult and uneven shift toward full battery electric vehicles (BEVs), the US and EU auto markets are under heavy pressure, lagging China’s market in terms of supply chain and battery technology readiness. In the US, the Trump administration is rolling back Biden-era electric vehicle (EV) policies, and its newly imposed tariffs may increase BEV prices, potentially slowing the pace of transition to BEVs. In this context, US and EU policymakers and automakers are reassessing where plug-in hybrid vehicles (PHEVs) fit within their industrial and climate strategies. The idea is that, given the US’s and EU’s less-developed minerals and battery sectors, range anxiety, and slowly developing charging infrastructure, PHEVs—with their smaller batteries relative to BEVs—can serve as a bridge technology that still offers carbon-reduction benefits.
This theory appears intuitive, but whether it maps with the projected global competitiveness and relevance of PHEVs remains an open question. This commentary analyzes current market and technology trends to better understand the future of PHEVs in an increasingly electrified transportation market. These trends indicate that PHEVs are unlikely to serve as a durable path for the US and Europe to achieve global EV competitiveness. Instead, their value lies primarily in serving as a transitional complement within domestic markets, provided policymakers address real-world emissions gaps, cost barriers, and supply-chain vulnerabilities that extend from China’s dominance. In other words, PHEVs can play a role in specific market segments and extend the utilization of the industrial base and therefore jobs in the short-term, but they can’t do so beyond this since both BEV and PHEV competitiveness is built on battery competitiveness now concentrated with Chinese players.
Global EV sales reveal an evolving dynamic between BEVs and PHEVs. In the early years of market growth, up to 2018, PHEVs were a popular entry point for consumers transitioning away from internal combustion engine vehicles (ICEVs), representing about 40 percent of total EV sales. As technology advanced and battery prices fell, BEVs surged to nearly 70 percent of total EV sales between 2018 and 2024, supported by policy incentives and growing consumer confidence in charging infrastructure.[i] Since 2024, PHEVs have grown only modestly, accounting for roughly one-third of global sales versus two-thirds for BEVs through mid-2025.[ii] In 2024, there were around two BEV models for every PHEV model available in China, Europe, and the United States. Globally, the ratio was over three to one.[iii]
Much of this dynamic has been shaped by China, which has looked at transport electrification as a way to compensate for its competitive disadvantage in ICE markets. Chinese demand today accounts for 67 percent of global PHEV sales and 56 percent of BEV sales.[iv] This is largely explained by China’s early investments in battery manufacturing and supply chains, which cemented its global leadership in EVs. China currently maintains the broadest support for PHEVs of any country in the world through a combination of incentives, including a 10 percent vehicle purchase tax exemption to production-side credits.[v] Europe, whose PHEV market is mostly geared towards high profit margin premium models, represents around 20 percent of global PHEV market share.[vi] The US follows in third place, at around 7 percent, with the few supportive federal policies that had been in place being rolled back over the past year, though PHEV support persists via California’s Zero-emission Vehicle Regulation.[vii]
PHEVs have also benefited from broader technological advancements in the EV industry, which is building next-generation batteries with higher energy densities and longer ranges. The size of PHEV battery packs has increased from an average of 13 kilowatt hour (kWh) in 2018 to 23 kWh by 2025, and thus allowed for longer electric-powered ranges.[viii] However, because PHEVs must accommodate both a battery pack and an ICE, they require two parallel and therefore complex propulsion systems that make their average price per kWh higher than that of BEVs, by roughly three times in 2024.[ix] In 2024, affordable PHEV options were limited in Europe and the United States, with only one model priced below $40,000 in Europe and four in the United States, while China stood out with nearly 40 models under $25,000.[x] Conversely, in China, PHEV prices have consistently dropped as a result of the country’s competitiveness in batteries: the sales-weighted average for medium-sized PHEVs in 2024 was 10 percent lower than conventional models in the same category, causing PHEV sales in the sector to more than double.
A key appeal of PHEVs lies in their ability to handle longer trips even when charging infrastructure is insufficient or congested. In China, this advantage has been reinforced by steady improvements in range: between 2020 and 2025, the electric-only range of PHEVs grew by more than 20 percent, reaching nearly 100 kilometers. By contrast, ranges in Europe and the United States have plateaued at around 65 kilometers.[xi]
Another distinct advantage of PHEVs is their lower mineral intensity. In 2025, European BEVs had an average pack size of about 70 kWh, compared with 19 kWh for PHEVs, in the passenger and light duty vehicle segment. In the US, it was 94 kWh compared with 19 kWh.[xii] US and European BEV and PHEV batteries also include a heavy makeup of nickel-cobalt-manganese (NCM) battery cells, which use more and more expensive critical minerals compared with LFP batteries. This means that, all else being equal, European and US PHEVs use three to four times less critical minerals than BEVs. In a context of critical mineral supply constraints and chokepoints,[xiii] they may therefore enable more drivers to shift to electric cars more quickly, with a spillover effect on demand for supporting infrastructure, particularly charging infrastructure. This can certainly be a boost to electrifying the transport sector, if drivers primarily use their batteries (see below). But a broader shift to PHEVs does not necessarily mean global competitiveness (see below also).
As with BEVs, China leads the global PHEV market, bolstered by favorable policy, consumer enthusiasm for Range-Extended Electric Vehicles (REEVs), and ongoing government incentive programs.[xiv] Chinese PHEV sales are expected to reach around 8 million units by 2030 in the base scenario and 9.3 million units in the upside case, compared with 1.6 to 1.7 million in Europe and 1.2 to 1.4 million in the US.[xv] While this suggests growth potential for Western markets, it also reflects China’s enduring grip on PHEV markets and models.
China’s dominance in the sector raises the question of whether a strategic refocus on PHEVs could allow Western automakers to compete globally, rather than solely within domestic markets. Given that PHEV competitiveness is tightly linked to battery manufacturing capabilities, countries applying tariffs to shield domestic BEV and battery industries may find themselves at a disadvantage in exporting PHEVs. Under such conditions, PHEVs could support national transition goals but are unlikely to generate new global leaders in transport electrification.
Domestic appetite remains notable, however. In the US, BEVs and PHEVs accounted for 8 percent and 2 percent of new passenger car sales in 2024, respectively—and these shares are expected to grow to 26 percent and 17 percent by 2034.[xvi] This suggests PHEVs will continue to have a role in the transition, even as global markets favor full electrification. Despite the expiration of federal incentives in the US in 2025, analysts still project steady, albeit slower, growth in broader EV uptake, suggesting that consumer interest is proving more stable than policy.[xvii] Still, in a global context, the trend is toward full battery electrification, with PHEVs increasingly acting as a transitional technology whose relevance narrows as infrastructure, costs, and regulations evolve in favor of BEVs. In China, 2024 BEV and PHEV sales stood at 26 percent and 19 percent, respectively, with PHEVs expected to peak near 30 percent in 2032 before declining to 18 percent by 2040 as BEVs reach 80 percent. Europe follows a similar path: BEV and PHEV shares were 14 percent and 6 percent in 2024, and projected to reach 67 percent and 8 percent by 2034, consistent with Europe’s policy focus on full electrification.[xviii] In 2025, PHEV sales climbed by almost 60 percent year on year, which analysts say reflects temporary policy and registration effects rather than a structural shift away from BEVs.[xix]
Battery demand further illustrates the growing divide between BEVs and PHEVs. In 2024, BEVs accounted for 148 gigawatt hours (GWh) of battery demand in Europe and 112 GWh in the United States, compared with just 17 GWh and 6 GWh from PHEVs. The battery share in the US for PHEVs was mostly NCM chemistries, comprising more than 99 percent of battery share in 2025.[xx] This contrasts with China, where lithium-ion phosphate (LFP) technology—used in 61 percent of PHEV batteries and projected to reach 76 percent by 2030[xxi]—has driven down costs and reinforced China’s structural advantage in PHEV battery pricing. These lower costs cascade into final vehicle prices, further strengthening China’s competitiveness.
Automakers and suppliers are increasingly pressing for PHEVs to be recognized as part of Europe’s decarbonization pathway. The German Association of the Automotive Industry (VDA) has recommended maintaining PHEVs beyond 2035 and easing regulatory adjustments, arguing that hybrids can help preserve industrial capacity and employment across the automotive value chain.[xxii] Similarly, the European Automobile Manufacturers’ Association (ACEA) and the European Association of Automotive Suppliers (CLEPA) have stressed a technology-neutral approach, noting that high electricity prices, trade tariffs, and uneven charging infrastructure require flexibility in compliance pathways.[xxiii]
This lobbying reflects not only industrial and job-protection motives—the European automotive sector employs over 13 million people[xxiv] and PHEV manufacturing may preserve existing supplier ecosystems—but also changing market dynamics: forecasted PHEV sales are rising for most years, and imports from China surged from 31,000 in 2024 to 46,000 in the first half of 2025, largely driven by BYD and Chery New Energy, which are taking advantage of PHEVs not being included in the EU’s additional duties.[xxv]
Market projections show that the absolute number of PHEVs sold will indeed increase in the medium-term (albeit slower than BEVs). The purpose of this increase, however, is not dictated by the data but instead will be determined by policy. PHEVs can function either as a detour that slows full electrification or as a limited but useful boost to electric driving, lower mineral demand, and scaling domestic battery and charging ecosystems. Different actors hold different preferences: some automakers see PHEVs as a way to preserve existing supply chains and employment, while regulators focused on long-term decarbonization increasingly worry about real-world emissions and lock-in risks. If the strategic goal is full electrification—an assumption that cannot be made for the US under the Trump administration—then the following challenges will need to be addressed for PHEVs to make a meaningful contribution.
PHEV pricing shows no consistent pattern across global markets, reflecting differing policy priorities and manufacturer strategies. While the general expectation is that PHEVs will cost less than BEVs due to their smaller batteries, they have become increasingly expensive relative to ICEVs—by over 30 percent for midsize cars and 50 percent for SUVs since 2022—partly because fixed battery system costs are spread over fewer cells and their pack designs are complex and as such add costs.[xxvi] In Europe, PHEVs remain the most expensive option across all vehicle categories, with only one of roughly 130 models priced below $40,000, compared with more than 40 BEVs and 155 ICEVs under the same threshold.[xxvii] In the United States, prices vary by segment: PHEVs are cheaper than BEVs in some SUV categories but considerably more expensive in others. In China, PHEV prices fell in 2024 while those in Germany rose, reflecting the influence of larger battery packs and domestic supply chain dynamics.[xxviii] The result is a fragmented pricing landscape in which PHEVs occupy multiple strategic roles—premium compliance vehicles in some markets, affordable entry-level hybrids in others—creating uncertainty for both automakers and consumers about the long-term position of these vehicles in the electrification transition.
REEVs—a type of PHEV that uses an ICE to recharge the battery when depleted—previously emerged as a way to appease consumer range anxiety concerns, illustrating both the flexibility and uncertainty facing the electrification of transport. In China, REEVs doubled their market share in 2024 from 5 percent to 12 percent before BEVs gained ground.[xxix] This temporary surge was viewed as evidence of REEVs’ potential as a transition technology when supported by strong policy incentives—such as China’s vehicle trade-in schemes—and appealing OEM offerings from manufacturers like Li Auto and BYD. Outside China, however, REEVs remain niche, with only 2,515 registrations in the first half of 2025, [xxx] though the United Kingdom and a few European markets have seen some uptake. Automaker strategies reflect these divergent signals: while groups like Volkswagen and Stellantis have reaffirmed their commitment to fully electric production, others continue to see hybrid and range-extended technologies as useful bridge options, particularly in regions where charging networks remain uneven. Yet it is unclear whether broader REEV adoption would meaningfully accelerate electrification or lower emissions, as these vehicles still rely on combustion engines for part of their range and may replicate some of the behavioral challenges observed with PHEVs.
PHEVs are often promoted as a lower-emission alternative to ICEVs, but real-world data has shown that they can emit nearly five times the official stated emissions and about the same as ICEVs, mostly due to usage patterns and the amount of time users are running on electricity versus fuel combustion. The mismatch between expected and actual emissions has accelerated efforts—mostly in Europe—to phase out PHEV subsidies, with the UK going as far as banning PHEV and hybrid EV sales by 2040.[xxxi] Remaining incentives are now conditional (based on electric range or corporate fleet use) and are being phased out in favor of zero-emission BEVs.[xxxii] As governments tighten climate targets, many automakers are accelerating their transition towards fully electric vehicles over hybrids. In the EU, stricter fleet-wide CO2 emission limits are pushing manufacturers to increase BEV sales to avoid financial penalties. This regulatory shift may gradually become hostile to PHEVs, particularly as questions continue to surface in Europe about their real-word emission performance.[xxxiii] For PHEVs to play a bigger part in transport decarbonization pathways in Europe and beyond, this element is a key area to address. Indeed, countries outside of Europe that are working on reducing their carbon footprint in transport may favor BEVs if they lack evidence that PHEVs have contributed to emissions reduction in advanced economies like the US and EU.
The United States and Europe still face a narrow window in which PHEVs can play a constructive role in marrying automaker competitiveness with decarbonization by sustaining consumer engagement in electrification, supporting segments where charging access remains uneven, and preserving parts of the existing automotive supply base during a difficult transition. Yet these benefits do not alter the structural reality that China’s dominance in PHEV-relevant supply chains (particularly LFP and low-cost pack integration) limits the extent to which hybrids can meaningfully strengthen Western global competitiveness in an increasingly electrified market. In global markets, the long-term signals are clear: BEVs continue to gain ground as infrastructure expands, costs fall, and regulatory frameworks tighten around real-world emissions.
If PHEVs are to function as complements rather than detours, policy design will be decisive. The US and EU Governments could take the following steps:
Together, these measures can allow PHEVs to serve the narrow but highly useful purpose of supporting the electrification transition by easing short-term market pressures while keeping long-term industrial competitiveness at the center of policy.
Victoria Prado is a Research Associate at Columbia University’s Center on Global Energy Policy, where she integrates the Trade and Clean Energy Transition initiative and conducts research on the geopolitics of critical minerals in Latin America. She was the first hire at a successful climate startup in Brazil, where she supported investor rounds, led the business intelligence team, and gained hands-on experience with carbon markets in emerging economies. Victoria also worked at the Rockefeller Foundation, advancing projects to expand energy access, accelerate coal phase-out in Southeast Asia, and deploy clean energy storage solutions in sub-Saharan Africa. Her work lies at the intersection of climate policy, sustainable development, and global energy systems, with a regional focus on Latin America. She holds a Master of Science in Sustainability Management from Columbia University and has experience in advising major players in Brazil’s oil, gas, and mining sectors on long-term sustainability strategy.
Dr. Tom Moerenhout is a Professor at Columbia University’s School of International and Public Affairs and leads the Critical Materials Initiative at Columbia’s Center on Global Energy Policy. His work extends to roles as Senior Advisor at the World Bank Energy and Extractives Group, Executive Director at the Geneva Platform for Resilient Value Chains, and Senior Associate at the International Institute for Sustainable Development and Intergovernmental Forum on Mining, Minerals and Metals. He has served as Visiting Professor at NYU, Sciences Po Paris, and the Geneva Graduate Institute.
Tom specializes in the intersection of geopolitics and industrial policy, particularly as they relate to energy, critical minerals, and battery supply chains. His work focuses on integrating the interests and influence of multiple actors across complex political economies to improve supply chain security and resilience. Tom has published extensively on sustainable development and energy policy reforms, specifically on energy subsidies, critical materials, and the economic development of resource-rich countries.
He has advised and consulted for various stakeholders, including the White House, Departments of Energy and State, USTR, and policymakers in several other countries, including the EU, Canada, India, Indonesia, Nigeria, DRC, Egypt, Iraq, Chile, and Brazil. His collaborative efforts span organizations such as the OECD, IEA, World Bank, UNCTAD, UNEP, OPEC, IRENA, and several philanthropic foundations.
Tom holds two master’s degrees and obtained his PhD at the Graduate Institute of International and Development Studies in Geneva. This academic background includes fellowships at LSE and the Oxford Institute for Energy Studies. He was also a Fulbright and Albert Gallatin Fellow, and a Swiss National Science Foundation Scholar.
In his downtime, Tom enjoys reading & writing, culinary experiences, football, skiing, and chess.
[i] Rho Motion, “BCA Datafile August 2025,” August 2025; International Energy Agency (IEA), “Global EV Outlook 2025,” May 14, 2025, https://www.iea.org/reports/global-ev-outlook-2025.
[ii] Rho Motion, “BCA Datafile August 2025,” August 2025.
[iii] IEA, “Global EV Outlook 2025,” May 14, 2025, https://www.iea.org/reports/global-ev-outlook-2025.
[iv] Rho Motion, “BCA Datafile August 2025”, August 2025.
[v] IEA, “Global EV Outlook 2025,” May 14, 2025, https://www.iea.org/reports/global-ev-outlook-2025.
[vi] Ibid.; Rho Motion, “BCA Datafile August 2025”, August, 2025.
[vii] Rho Motion, “BCA Datafile August 2025,” August 2025; California Air Resources Board, “Zero-Emission Vehicle Regulation,” n.d., https://ww2.arb.ca.gov/our-work/programs/zero-emission-vehicle-program.
[viii] Rho Motion, “BCA Datafile August 2025,” August 2025.
[ix] IEA, “Global EV Outlook 2025,” May 14, 2025, https://www.iea.org/reports/global-ev-outlook-2025.
[x] Ibid.
[xi] Ibid.
[xii] Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
[xiii] IEA, “Global EV Outlook 2024: Trends in Electric Vehicle Batteries,” April 23, 2024, https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-vehicle-batteries.
[xiv] Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
[xv] Rho Motion, “EV And Battery Forecast: August 2025,” August 2025. This commentary draws on Rho Motion’s EV & Battery Forecast (Q2 2025) for regional projections of BEV and PHEV sales, battery demand, and technology trends. Rho Motion is an intelligence firm specializing in EV and battery markets whose granular, model-level forecasting is widely used by industry and policymakers. As with all proprietary market intelligence forecasters, not all of its underlying assumptions and methods are publicly disclosed, and long-term projections involve inherent uncertainty, particularly in markets without a clear policy direction, like the United States.
[xvi] Rho Motion, “EV And Battery Forecast: August 2025,”August 2025.
[xvii] Bloomberg, “Electric Vehicles Make Up 11 Percent of US Car Sales,” October 16, 2025, https://www.bloomberg.com/news/articles/2025-10-16/1-in-10-us-car-sales-is-electric-but-future-is-uncertain-without-subsidies.
[xviii] Rho Motion, “EV And Battery Forecast: August 2025,” August 2025.
[xix] Rho Motion, “Record Monthly EV Sales, Breaking the Two Million Mark,” October 15, 2024, https://rhomotion.com/membership-industry-updates/record-monthly-ev-sales-breaking-the-two-million-mark/.
[xx] Rho Motion, “EV And Battery Forecast: August 2025,” August 2025.
[xxi] Ibid.
[xxii] VDA, “10-Point Plan for Climate-Neutral Mobility: Reduce CO2 Emissions in Transport, Ensure the Competitiveness of the Automotive Industry,” June 5, 2025, https://www.vda.de/en/press/press-releases/2025/250606_PM_2030-2035_CO2-Flottenregulierung_EN.
[xxiii] ACEA, CLEPA, “The EU Risks Missing the Turn on Its Automotive Transition – September’s Strategic Dialogue Is the Change to Correct Course,” August 27, 2025, https://www.acea.auto/files/Joint-ACEA-CLEPA-letter-to-President-von-der-Leyen.pdf.
[xxiv] European Commission, “President von der Leyen Chairs Third Strategic Dialogue with the European Automotive Industry on 12 September,” September 10, 2025, https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2038.
[xxv] EV And Battery Forecast: August 2025,” August 2025; Benchmark, “Chinese EV Brands Look to PHEVs to Avoid EU Tariffs,” May 2, 2025, https://source.benchmarkminerals.com/article/chinese-ev-brands-look-to-phevs-to-avoid-eu-tariffs; Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
[xxvi] Ibid.
[xxvii] IEA, “Global EV Outlook 2025,” May 2025, https://www.iea.org/reports/global-ev-outlook-2025.
[xxviii] Ibid.
[xxix] Rho Motion, “EV And Battery Forecast: August 2025,” August 2025; Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
[xxx] T&E, “Smoke Screen: The Growing PHEV Emissions Scandal,” October 16, 2025, https://www.transportenvironment.org/articles/smoke-screen-the-growing-phev-emissions-scandal.
[xxxi] Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
[xxxii] European Commission, “European Alternative Fuels Observatory: Portugal,” n.d., https://alternative-fuels-observatory.ec.europa.eu/transport-mode/road/portugal/incentives-legislations.
[xxxiii] Rho Motion, “EV & Battery Quarterly Outlook Q1 2025,” 2025.
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