General Motors reported a 5.5% decline in third-quarter vehicle sales, driven by a sharp contraction in electric vehicle deliveries following the termination of the US $7,500 federal EV purchase credit. Meanwhile, Toyota edged closer to GM’s overall sales figures, benefiting from growing hybrid and electrified model demand.
- GM’s EV sales collapse after US $7,500 credit removal
- Toyota’s electrified vehicles rise 28.5%, closing sales gap
- Europe’s EV mandates sustain strong electric sales growth
What happened
GM’s third-quarter sales declined by 5.5% to 670,974 vehicles, with its electric vehicle sales suffering a dramatic reduction. The Equinox EV sales plummeted 92.4% to just 1,905 units following the expiration of the $7,500 US federal tax credit. The Blazer EV and Hummer EV also saw significant drops of 84.4% and 72.9%, respectively. The previous year's quarter saw inflated EV sales due to buyers rushing to take advantage of ending incentives, making the current decline appear more severe.
In contrast, Toyota experienced a modest sales growth of 0.6%, with electrified models including hybrids rising 28.5%, now accounting for over 57% of its total sales. GM’s once sizeable lead in sales over Toyota narrowed substantially in 2026, with the difference dropping to under 136,000 vehicles, compared to 335,000 a year earlier.
Why it matters
These results underscore the critical impact of government policy on EV adoption. The US removal of the $7,500 credit left GM's EV sales vulnerable, as consumer incentives play a pivotal role in demand. By contrast, Europe’s continued enforcement of CO2 targets and mandates requiring electric vehicle sales—33% required in the UK this year—help sustain strong EV market performance, with EVs taking 29% of new registrations in August.
Additionally, fuel price disparities reinforce consumer behavior differences. The US faces petrol prices around $4.41 a gallon, while the EU average is nearly double, close to $8.95 a gallon, encouraging European drivers to adopt electric and hybrid vehicles more readily. This divergence poses challenges for GM's EV market prospects in the US and emphasizes the importance of policy and pricing environments for automotive OEMs globally.
What to watch next
GM’s ongoing investment in EV battery technology, including $1 billion spent on manganese-rich cells, comes amid a shrinking US EV market absent subsidies. Monitoring how GM adapts its EV pricing and product mix to recover sales momentum will be critical. Lower-cost models like the Chevrolet Trailblazer and Buick Envista showed positive sales growth, which may guide GM’s near-term strategy.
Attention will also focus on how regulatory shifts in the US might restore or replace incentives, potentially reversing EV sales declines. Meanwhile, Toyota’s continued push in electrified vehicles, combined with hybrid popularity in both America and Europe, suggests automakers will increasingly balance electric and hybrid offerings. Finally, global fuel price fluctuations and tightening CO2 regulations will strongly influence future market dynamics.