June 2025 U.S. Auto Sales Dip: Why Hybrids Are Up & EVs Are Cooling Off
Published On: July 1st, 2025
June auto sales in the U.S. slipped slightly to around 1.25 million units, according to the latest industry data, showing signs of a cooling market after a first-half buying rush earlier in the year. While total vehicle sales remain solid, a closer look reveals a shifting preference among consumers: hybrids are gaining traction, while demand for electric vehicles (EVs) is showing signs of softening.
Retail sales were still up 7.5% year-over-year in the first half of 2025, but fleet sales dropped about 5%, according to reporting from CBT News. Inventory levels are stabilizing, with days’ supply hitting 49—higher than earlier this year.
'The biggest story, though, is the hybrid surge. In June, hybrid models accounted for nearly 14% of new vehicle sales—a strong climb as buyers look for fuel efficiency without the full commitment of going electric. Models from Toyota, Honda, and Ford are leading the way, with consumers drawn to their reliability, lower sticker prices, and freedom from charging constraints.
By contrast, EV market share dropped to 8.7% in June, down from 10.3% in May. Analysts point to several causes: rising interest rates, increasing monthly payments, a slower rollout of public charging infrastructure, and consumer hesitation around long-term resale value. Even Tesla, still the dominant EV brand in the U.S., has seen fluctuations in deliveries due to pricing strategy changes and stiffer competition.
Automakers are responding. Ford and GM have adjusted their EV production forecasts, focusing more on plug-in hybrids and extended-range electric options. Hyundai and Kia are also reshuffling future EV launch timelines to reflect more cautious growth expectations. Industry watchers view the EV slowdown not as a collapse, but a natural plateau after aggressive early growth.
Looking ahead, the third quarter could bring new incentive campaigns aimed at spurring EV demand, especially with federal EV tax credits still in play. But hybrids are likely to continue their steady climb, offering a middle ground that appeals to budget-conscious and infrastructure-aware consumers.
The current realignment in consumer preference doesn’t necessarily derail the broader green vehicle transition, but it does suggest that, for now, practicality is outpacing idealism.