Colorado experienced a decline in clean car sales during the first quarter of 2025, with anti-Tesla sentiment and a scheduled reduction in state EV subsidies contributing to the downturn. According to Matthew Groves, executive director of the Colorado Automobile Dealers Association, the state’s auto dealers considered it a relatively better start to 2025 for clean cars, given the challenges posed by the state subsidy cut, expiration of an Xcel subsidy, and discussions about expensive tariffs. The combined sales of fully electric and plug-in hybrid electric vehicles accounted for 26% of the Colorado market from January to March, down from 31.3% in the last quarter of 2024.
“It’s actually less of a drop than I expected,” Groves said. “I think we may have been bolstered a bit by an outstanding week at the end of March.” Groves anticipates that tariffs on imported vehicles could further impact the market, potentially making it more challenging for consumers to afford new cars.
Sales of hybrids, which are not included in the clean car category, actually rose by 1% in the first quarter, despite still being far behind their peak in 2018. Fully electric car sales, however, dominated the clean car segment, with Tesla being a significant player. The state’s take-at-the-register tax credit dropped to $0 from $5,000 on January 1, potentially affecting sales.
The Colorado Automobile Dealers Association reported that overall car sales jumped 11.8% over the year-earlier quarter. However, the potential overhaul of U.S. trade policy has added uncertainty to the market, with some fearing that tariffs could lead to higher car prices.
“Yes, they’ve been threatening cancellation since November, maybe before,” Groves said. “But until we see it on paper, we are going to encourage people to keep taking advantage of it.” The uncertainty surrounding future regulations and subsidies continues to impact consumer behavior and sales in Colorado’s automotive market.
