Sales of electric vehicles reached a record 146,332 in August, just one month before the phaseout of a major tax credit that has spurred sales since April 2023, according to initial Cox Automotive estimates released Oct. 10.

EV share last month was a record 9.9% of total sales and higher than the July share of 9.1%. With government-supported EV tax credits, updated in the Inflation Reduction Act of 2022, now set to expire by Sept. 30, sales trends suggest Q3 2025 will set an all-time record for EV sales in the U.S. (The current record is Q4 2024: 365,824.)

The initial estimate of the EV average transaction price in August was $57,245, up 3.1% from the revised lower EV ATP of $55,562 in July. Year over year, EV prices were mostly unchanged, lower by 0.1%. The higher volume of EV sales helped push the overall industry ATP higher as well.

EV incentives in August were down from the July record, but at 16% of ATP, EV incentives remain more than twice as high as the overall market. The average incentive package on a new EV was more than $9,000 in August. A year ago, incentive packages for EVs averaged 13.6% of ATP. 

Tesla, the leading EV seller in the U.S. by far, saw ATPs climb 2.9% in August to $54,468. Compared to a year ago, ATPs in August were lower by 5.5%. Tesla’s sales last month were lower year over year by 6.7% and the EV leader’s share of all EV sales in the U.S. fell to 38% last month, the lowest point in the modern EV era.

“The one constant in the automotive business is that fresh product sells well," said Stephanie Valdez Streaty, senior analyst at Cox Automotive, in a Sept. 10 news release. "While Tesla’s Model Y update has slowed the company’s sales decline, it’s not getting easier for the EV pioneer because the market is now flooded with all-new, fresh EVs from mainstream competitors — consumers have more choice than ever. The current surge in EV sales is being driven by product innovation, motivated dealers, and an urgency ahead of the IRA tax credit phase-out.”