You might think that killing the $7,500 federal EV tax credit would put a dent in electric vehicle sales. But the data says otherwise. In May, U.S. EV sales hit a record high, according to a new report from Cox Automotive. And this isn't just a blip—it's a sign that the market is maturing beyond government incentives.

President Donald Trump rescinded the former President Joe Biden-era credit, but consumers are still buying EVs in droves. The average transaction price for a new vehicle in the U.S. during May was $49,220, slightly lower than April's $49,456. But for EVs, the average price was $54,532—a 4% drop from May 2025. That's a meaningful decline, and it's helping drive adoption.

Initial estimates suggest that EV sales in May could hit 85,000 units, the highest since the end of the federal EV credit at the end of September 2025. And here's the kicker: despite the lack of a direct federal incentive, automakers and dealers are still offering generous discounts. The report notes that EV incentives made up 14% of the average transaction price, equal to roughly $7,600. "Electric-vehicle incentives remain elevated at nearly twice the industry average," the report said.

So, effectively, the market is self-correcting. Without a government check, manufacturers are cutting prices and offering deals to move metal. And it's working.

Tesla Inc. (TSLA), which still dominates the U.S. EV sector, reported a transaction price drop of 3.4% year-over-year from May 2025 and 1% lower than April 2026. The Model 3 and Model Y continue to account for almost all of Tesla's sales—96%, to be precise. Customers paid an average of $49,082 for the Model 3 and $51,537 for the Model Y in May.

But Tesla isn't just cutting prices; it's also selling more cars globally. After months of declines, Tesla recorded growth across multiple markets. In China, sales grew 22% in May, and exports from its Shanghai factory surged 68%. Tesla sold 47,821 units via retail sales in China alone. In Europe, the numbers are even more dramatic: sales in France jumped 655% to 5,446 vehicles. Sweden saw a 71% increase to 858 vehicles, Denmark grew 136% to 1,750, and Spain rose 113% to 1,690.

MarketDash Edge Rankings show that Tesla offers excellent Growth and Quality, but poor Momentum and Value. Tesla also fails to provide a favorable price trend in the short, medium, and long term. That said, the sales momentum is real.

Price Action: Tesla shares were down 2.18% at $388.04 during premarket trading on Thursday.

The bottom line? The EV market is no longer a subsidy-dependent toddler. It's growing up, and it's doing it without the training wheels.