Coloradans rushed to capture expiring federal tax credits in the past three months, pushing the clean-car portion of new sales to a record 32.4% and buying a higher ratio of electric vehicles and plug-in hybrids than any other state, according to dealer statistics.
The EV and plug-in hybrid EV share of new car sales jumped sharply from 24.2% in the second quarter and surpassed the single-quarter record share of 31.5% at the end of 2024. Consumers crowded EV dealers to take advantage of a $7,500 federal subsidy taken at the cash register, before it expired Sept. 30 as a result of new Trump administration and congressional energy policies.
In July, August and September this year, full-battery EVs made up 26.4% of Colorado new car sales, and plug-in hybrids took 6% of sales; both categories are considered clean energy cars under federal and state rules. A third category of important but less-efficient new car, hybrids like the Toyota RAV4 Hybrid or Subaru Forester Hybrid, made up 12.6% of sales in the third quarter, down slightly from the previous quarter.
“Coloradans and the free market are saying loud and clear that affordable, clean and efficient electric vehicles are here to stay. Colorado leads the nation in electric vehicles and these clean, quiet, fun cars are saving Coloradans money while improving air quality. We look forward to building on this important work to give Coloradans more vehicle choices,” Gov. Jared Polis said in a statement accompanying the stats.
While Colorado’s auto dealers predicted in their quarterly report that fourth quarter EV sales will drop with loss of the generous federal credit, state officials will try to keep the party going with a boosted local incentive. For the remainder of 2025, all Colorado buyers get $3,500 state tax credit off the top for a new EV costing up to $80,000, and $2,500 more if the price is under $35,000. (The $3,500 credit will fall to $750 on Jan. 1, but the extra $2,500 for cheaper EVs will stay in place.)
Starting in November, Colorado is also raising the stakes in its cash-for-clunkers program, called Vehicle Exchange Colorado. Consumers at 80% or below of their area median income can turn in a gas-fueled vehicle that failed an emissions test or is 12 years or older, and receive $9,000 toward a new EV, up from $6,000. An income-qualified buyer of a used EV turning in an old car would receive $6,000, up from $4,000. All those offers are available for leases, as well.
Colorado’s 32.4% share for EVs and plug-in hybrids combined in the third quarter pushed it ahead of perennials California, Oregon and Washington, and at the top of all 21 states reporting quarterly sales registrations. The national average for combined clean-car sales was only 12.6%.
The Tesla Model Y, Nissan Ariya and Hyundai Ioniq 5 led fully-electric sales in Colorado’s third quarter. The most popular gas-fueled vehicles in Colorado continue to be the Ford F-series pickups and the Subaru Crosstrek.
