EV Sales Were Plummeting Before Trump Overturned California Mandate

By Paul Gessing

Under the plan imposed by Gov. Lujan Grisham and her handpicked Environmental Improvement Board, 43% of all vehicles sold in New Mexico were supposed to be electric by 2026. Fortunately for New Mexico car buyers, back in May the US Congress (including New Mexico Democrat Rep. Gabe Vasquez) voted to eliminate California's exemption from federal clean air rules (and thus the ability of other states) to force unwilling buyers  to purchase electric vehicles.

A new report from the pro-EV trade group Alliance for Automotive Innovation indicates that as of the first quarter of 2025, adoption of EVs had begun to decline even before Congress acted. Perhaps the mere election of Donald Trump shifted consumer behavior back toward gas-powered vehicles, but the reason for this decline is unclear.

What we do know is that according to the Alliance's data New Mexico's EV market share plummeted by 10% from 5.53% in Q4 2024 to 4.98% in Q1 2025. The report found that declines occurred in states whether they mandated EVs or didn't.

Given those low and dropping numbers there is no chance of New Mexico complying with the 43% EV sales target. But, rather than thanking Trump and Congress for averting a self-inflicted crisis, the Gov. instead criticized them for  "putting polluters over people and creating chaos for consumers and the market." New Mexico also joined California's lawsuit which amounts to a long-shot attempt to get the courts to overturn Congressional action and thus restore that State's federal waiver.

The decline in EV sales is likely a result of market saturation among a relatively niche group of people who are interested in buying them. Even as Congress killed off EV mandates numerous federal and state subsidies for EVs remain in effect. According to the New Mexico Environment Department:

Under current federal policy, tax credits of up to $7,500 for new EVs and up to $4,000 for used EVs are available through September 30, 2025.

You can also get a tax credit of up to $1,000 to help cover the cost of purchasing and installing a residential or commercial EV charging station. This federal tax credit is available through June 30, 2026.

On top of those federal subsidies, the State of New Mexico offers a tax credit of up to $3,000 for the purchase or lease of a new or used qualifying vehicle and a tax credit of up to $25,000 for the purchase and installation of clean car charging units.

New Mexico's subsidies and breaks will remain in effect and are augmented by recently-enacted building codes which require EV charging stations and/or charging infrastructure in all new houses and apartment construction.

All of these either take money out of the pockets of non-EV drivers or raise the price of housing which is already unaffordable in much of our state. While federal subsidies for EVs are on track to expire, for the time being New Mexico will continue to pump taxpayer dollars into EVs, charging stations, and other EV-related infrastructure that primarily benefit wealthy EV owners.

The future of EVs and other "alternative" fuel vehicles is very much in question. Absent massive subsidies and mandates, EVs appear to be a niche product in the United States. Perhaps new technology (like massive improvements in battery technology) will change that. But with the Trump Administration's "drill baby drill" philosophy keeping oil and gas prices low it is unlikely that auto buyers (as opposed to politicians) will flock to EVs. Perhaps hydrogen or some other technology will prove superior to EVs?  

Regardless of what the future holds for the automotive market, New Mexico's political leadership should reinstate true freedom of vehicle choice by eliminating subsidies and mandates, regardless of the technology. And, as long as the gas tax plays a role in funding road maintenance EV owners should also pay a fee of some kind to maintain the roads. It's only fair.   

Paul Gessing is president of New Mexico's Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.