- Light-duty electric vehicles consumed 8% more electricity in the first half of 2026 than a year earlier, the slowest pace in at least three years according to the Energy Information Administration. That compares with growth of 13% to 24% in recent years, with the 24% peak recorded in the second half of 2023.
- Sales have fallen sharply since federal tax credits reducing the cost of buying and leasing EVs expired in September 2025. New EV sales declined 19% in the first half of 2026 against the previous six months, per EIA data.
- Manufacturers have responded. Ford and Honda are among automakers that have discontinued low-selling electric models since the end of last year.
- Cumulative consumption continues rising even so. Electricity use by light-duty EVs has more than doubled since 2023, reaching almost 14 billion kilowatt-hours in the first half of this year, because the installed fleet keeps charging regardless of what new sales do.
What Happened?
Battery-electric and plug-in hybrid vehicles draw power from the grid, and their growing numbers have contributed to rising electricity demand. The EIA data measures that consumption directly rather than inferring it from vehicle registrations.
Why It Matters?
The 8% growth figure is a lagging measure and should be read as a floor rather than a demand signal. Electricity consumption reflects the installed base of vehicles, so it keeps rising as long as net fleet additions stay positive, even while new sales fall 19%. That means the slowdown in consumption growth understates how sharply the underlying market has turned, and the deceleration from 24% to 8% will continue mechanically as weaker sales cohorts work through the fleet. Anyone modelling EV electricity load off recent consumption trends is extrapolating from a cumulative measure. The policy causality here is unusually clean. Federal tax credits expired in September 2025 and sales fell 19% in the following half, which is about as clear a natural experiment on subsidy dependence as this market has produced, and it should inform adoption forecasts that assume organic demand growth. Ford and Honda cutting models is the supply-side confirmation. The implication for power markets is the one worth carrying. Utilities and independent power producers have been building load forecasts around two electrification stories, data centres and electric vehicles, and only one of them is delivering. AI infrastructure demand is strong enough that Nvidia is investing directly in generation and insurers hold tens of billions in AI-linked energy projects, while the EV leg is decelerating. Capacity planning built on both growing together risks overestimating total demand, and that matters for anyone underwriting long-dated power assets on volume assumptions. EV load also remains a small share of total US electricity consumption, so the AI story dominates the near-term picture regardless.
What Next?
Second-half EIA data will show whether consumption growth falls below 8%, which is the likely direction given the sales decline already recorded. Watch fourth-quarter EV sales for evidence of stabilisation now that a full year has passed since the credits expired, since year-over-year comparisons get easier from here. Further model discontinuations at major automakers would confirm that manufacturers see the weakness as structural rather than cyclical. Any state-level incentive programmes replacing the expired federal credits are the policy variable that could change the trajectory. For power markets, watch whether utility load forecasts are revised to separate data centre demand from transport electrification, because those two are now moving in opposite directions.
Affected Tickers and Coins: F, HMC, TSLA, GM, CHPT
Source: Bloomberg
