It’s becoming a pattern. Months of warnings that Colorado electric vehicle sales could slow are now showing up as reality in new car registrations.
Clean energy analysts had been predicting that a combination of factors could drag down once-burgeoning U.S. and local EV sales: previously scheduled cuts to Colorado’s tax credit; threats and then signed legislation to dump the lucrative federal tax credit; and, various political and cultural factions’ anger at Tesla chief Elon Musk, tarnishing the runaway leader in U.S. EV sales.
A Colorado Auto Dealers Association 2Q 2025 report said electric vehicle sales as a share of Colorado car and light truck sales dropped again in the second quarter of 2025.
Combined electric and plug-in hybrid electric vehicle sales – the two drive trains that qualify as clean under Colorado rules – slumped to 24.2% of registrations in the second quarter of 2025, according to a periodic Colorado Auto Dealers Association report. That’s down from a combined 26% of the overall new car and light truck market in the first quarter, and from 31.3% in the fourth quarter of 2024.
The drop in share happened even as overall Colorado car and light truck sales jumped 8.3% in the first half of 2025 from the same period a year earlier.
The auto dealers aren’t jumping for joy, however. Their economic analysis for 2025 year-to-date found people rushing to secure new cars before tariffs kicked in for the second half of the year, merely shifting sales sooner rather than indicating a booming car environment overall.
Colorado officials, who have mandated carbon emissions reductions built on assumptions of nearly a million EVs on the road by 2030, were prompted to make “buy now” a declared state policy. The Colorado Energy Office notes the $7,500 federal EV credit disappears at closing time Sept. 30. The state credit was scheduled to step down again Jan. 1, then budget analysts said rules required it to be halved after slowing revenue growth triggered cuts to subsidies.
Colorado had previously been running ahead of EV sales goals to reach the 2030 targets, but more severe backsliding would erase any margins for error.
Colorado registrations for Tesla, which only sells fully electric vehicles, dropped nearly 13% in the second quarter of 2025 from a year earlier, and are down 7.8% year to date.
Erosion in EV and PHEV sales is somewhat countered in the cleaner-car market by soaring sales of hybrid vehicles, which combine an internal combustion engine with an electric battery charged by regenerative braking. While hybrids do not qualify as zero-emission vehicles, they are more efficient and produce fewer emissions than traditional gasoline engines. The Toyota Prius has been the most popular hybrid for years. “Hybrid registrations increased 36% in the first half of this year, easily outpacing the overall market. Market share reached 13.3%,” the CADA report said. About 48% of Toyota registrations in the first six months of 2025 were hybrids.
