Vermont electric-vehicle sales fell in 2025; dealers warn of leasing, revenue and used-market risks

At a Jan. 13 House Transportation Committee briefing, Matt Coda, who represents the Vermont Vehicle and Automotive Distributors Association, told lawmakers Vermont saw a notable retreat in electric-vehicle sales in 2025 and outlined downstream risks for the used-car market and transportation revenue.

Coda said Vermont registered roughly 100,000 vehicle purchases in 2025 and that, while gasoline and diesel sales have been broadly flat, the state’s new electric-vehicle market cooled: “A 20% drop in battery electric vehicles in 2025,” he said, and “a 28% decrease” in plug-in hybrid sales compared with 2024. He contrasted Vermont’s trajectory with a modest national increase in light-duty vehicle sales during the same period.

Why the drop? Coda pointed to several factors and cautioned against a single explanation. He described the end of a federal $7,500 tax credit — testified to as phased out Sept. 30, 2025 under federal legislation referenced in testimony as “HR 1” — as one contributing force but said Vermont did not see the late‑2024 buying surge some other states reported: “We didn’t see that in Vermont, though,” he said. He added that manufacturers’ product decisions, changing lease incentives and consumer preferences for trucks and SUVs also matter, calling the situation “a gumbo.”

Coda gave policymakers several data points meant to frame fiscal risk. He said Vermont sells about 280,000,000 gallons of gasoline and about 60,000,000 gallons of diesel per year and estimated that fuel-related collections yield roughly $100,000,000 for the transportation fund. Because gasoline taxes are largely tied to gallons sold rather than vehicle price, Coda warned that shifts in the composition of vehicles and travel patterns — including rising hybrid adoption and any long-term change in EV uptake — could affect revenues differently than changes in purchase taxes.

Leases and the used market featured in the briefing. Coda reported that roughly 70% of new BEV transactions were lease deals, versus about one‑third of vehicle transactions overall. He said that “a lot of these favorable leases come off lease” over the next 24–36 months and that late‑summer to early‑fall 2026 should provide the first clear signal of whether those EVs will remain in Vermont’s used market or be returned to manufacturers or leave the state. That timing matters, he said, because how and where those vehicles reenter the market will affect the share of non‑gas-burning vehicles in Vermont’s fleet.

Committee members pressed Coda on measurement choices and caveats. Coda said the association tracks registrations (green plates) rather than point of sale because registrations align with purchase and use tax receipts; he acknowledged DMV reporting lags can shift month-to-month comparisons. On penetration, he said EVs and plug-in hybrids make up roughly 10% of new sales through 2025 but only about 3% of all registered vehicles in Vermont when older cars are included.

Lawmakers also questioned whether state incentives could restore growth. Coda said rebates and stacked incentives do move EV purchases, but that the effectiveness and fiscal cost depend on program design and funding sources. “Would incentives help? Yes. Would it be worth the cost? I don’t know,” he said, urging further analysis.

Coda did not recommend a single policy fix at the hearing; instead, he urged the committee to monitor lease returns, the evolving used‑EV market and monthly registration data, which his group will post. The committee did not take formal action during the briefing.