Despite the loss of the $7,500 tax credit, electric vehicle (EV) sales in the US have reached a record high. This milestone was achieved after President Donald Trump rescinded the former President Joe Biden-era Federal EV Credit.
EV Sales Hit Record High, Average Transaction Price Decreases
The average transaction price for a new vehicle in the US during May was $49,220, which is slightly lower than April’s figure of $49,456. However, the average EV transaction price during May was $54,532, representing a 4% year-over-year (YoY) decline from May 2025.
Initial estimates suggested that EV sales in May could hit 85,000 units, the highest since the end of the Federal EV Credit in September 2025. Despite the lack of incentives, EVs made up for 14% of the average transaction price, equal to roughly $7,600. Electric-vehicle incentives remain elevated at nearly twice the industry average.
How Tesla Fared
Tesla Inc. reported a transaction price drop of 3.4% YoY from May 2025 and 1% lower than April 2026. The Model 3 sedan and the Model Y crossover SUV continued to account for almost the entirety of sales at 96%.
Customers paid an average of over $49,082 for the Model 3 in May, while they paid over $51,537 for the Model Y. Tesla recorded a growth in its sales across multiple markets after months of declines.
Tesla Sales Grow
Sales grew 22% in China, as well as exports from its Shanghai factory growing 68% in May. Tesla sold 47,821 units via retail sales in May. Meanwhile, sales in France surged 655% to 5,446 vehicles during May. Tesla also sold 858 vehicles in Sweden, demonstrating a 71% growth.
Sales grew 136% to 1,750 in Denmark and 113% to 1,690 in Spain. The news comes as Tesla’s sales continue to dominate the US EV sector.
Price Action
Tesla shares were down 2.18% at $388.04 during premarket trading. The company’s excellent growth and quality are offset by poor momentum and value. Tesla also fails to provide a favorable price trend in the short, medium, and long term.