US EV sales surge in July, but tariffs and tax credit expiration threaten affordability.

US electric vehicle (EV) sales rose 6.6% YoY in July, driven by a "buy now" mindset ahead of looming tariffs and policy changes that could increase prices. Despite a 27% increase in EV models available, new inventory growth has slowed to 9% YoY. Tariffs are set to push prices higher, with average new-vehicle prices potentially increasing by $4,000-$6,400. The used EV market is gaining momentum, with inventory up 33% YoY and affordable models selling 20% faster than average.

Volkswagen has secured a significant funding boost to produce its most affordable electric vehicle (EV) to date, the ID.1. The German automaker has been awarded €30 million ($35 million) by the Portuguese government to manufacture the ID.1 in Portugal, with production scheduled to commence in mid-2027 [1].

The ID.1 is set to be the smallest and most affordable EV in Volkswagen's lineup, starting at approximately €20,000 ($22,000). This marks a significant milestone in Volkswagen's transition towards more accessible electric vehicles. The ID.1 is expected to be a software-defined vehicle (SDV) model, leveraging Volkswagen's partnership with Rivian [1].

The ID.1 will fill a critical gap in Volkswagen's Electric Urban Car Family, joining the ID.2 and an SUV version, both slated for release in 2026 and 2027, respectively. The new entry-level EV is designed to be slightly smaller than the Polo, measuring just 3,880 mm in length [1].

Meanwhile, the U.S. EV market has shown some signs of resilience despite challenges. In July 2025, EV sales rose 6.6% year-over-year (YoY), driven by a "buy now" mindset ahead of impending tariffs and policy changes that could increase prices. The used EV market is also gaining momentum, with inventory up 33% YoY and affordable models selling 20% faster than average [2].

Despite these positive indicators, the EV market share in the U.S. remains below 10%. According to John Goreham, the Vice President of the New England Motor Press Association, the market share is expected to approach 10% in August but may not exceed it. However, September is anticipated to see the market share pass 10%, potentially reaching as high as 10.5%. The fourth quarter is projected to see a significant drop in market share, potentially returning to 2023 levels or lower [2].

The African electric vehicle market, on the other hand, is poised for substantial growth. The market size is anticipated to reach USD 17.58 billion in 2025 and USD 38.39 billion by 2033, growing at a CAGR of 10.26% during the forecast period from 2025 to 2033 [3]. This growth is driven by factors such as urban air quality concerns, energy access innovations, and the potential for leapfrogging in mobility systems.

References:
[1] https://electrek.co/2025/08/20/volkswagen-secures-35-million-to-build-most-affordable-ev-yet/
[2] https://www.torquenews.com/1083/evs-added-just-1-us-market-share-july-will-evs-touch-10-us-market-share-q3-crashing-and
[3] https://www.marketdataforecast.com/market-reports/africa-electric-vehicle-market