For most of 2024 and the first half of 2025, Ford's naming decision was being validated by the market whether Mustang purists liked it or not. The Mach-E consistently outsold the two-door petrol car. The electric crossover moved 51,620 units for the full year 2025. The ICE Mustang managed 45,333. The Mach-E won.
Then September 2025 arrived, and with it the expiry of the federal EV tax credit under the Trump administration's tax legislation. Up to $7,500 had been available to buyers of qualifying electric vehicles. Gone overnight. What followed was textbook demand distortion. In Q3 2025, before the credit expired, buyers rushed to close deals. Mach-E sales hit 20,177 units in the quarter alone, a 51 per cent year-on-year gain. The last month of the credit's life was a fire sale. September 2025 Mach-E sales: 7,643 units.
October 2025: 2,906. November 2025: 3,014, down 49.2 per cent year-on-year. December: 9,658 for the quarter total, roughly a third of what Q3 delivered. By January 2026 the Mach-E was down 70.5 per cent year-on-year, selling 1,040 units against the ICE Mustang's 3,609. The petrol car outsold the electric one by more than three to one.
Meanwhile the gas Mustang had its own story running in parallel. Sales had been dismal through most of 2025, down 31.6 per cent in Q1, barely positive in Q2, soft in Q3. Ford had stripped the manual gearbox option from the 2.3 litre EcoBoost, introduced a largely digital interior that buyers were not warming to, and priced the base GT at $50,000. The seventh generation car looked too much like the sixth, which looked too much like the fifth. Two decades of nostalgic riffs were running out of road.
What changed was two new cars at the top of the range. Ford launched the Mustang Dark Horse SC, a supercharged variant with headline performance numbers, and the GTD, a road legal version of the GT3 race car with 800 horsepower and a £250,000 price tag, entered the market in late 2025. Neither sells in volume. The GTD is deliberately limited. But the halo effect was real. Mustang sales surged 66.5 per cent in Q4 2025 to 12,515 units. January 2026 came in at 3,609, up 50.4 per cent year-on-year. Dodge saw the same phenomenon in 2015 when the Charger Hellcat's launch lifted the entire range. Somebody comes in to look at a $80,000 supercharged muscle car, leaves in a $35,000 EcoBoost.
The full year 2025 result still showed the Mach-E ahead: 51,620 to 45,333. But the trajectory going into 2026 is sharply reversed. Cox Automotive Senior Economist Charlie Chesbrough summarised the broader market context directly:
"The headwinds from higher prices and fewer government subsidies for electric vehicles are finally slowing the market after a surprisingly strong previous six months. Sales began surging in the spring as buyers rushed to market to beat expected higher prices in the wake of announced tariffs."
Ford is not unique here. The EV tax credit expiry hit the entire American market, and every manufacturer without a low-cost product or an established charging ecosystem took a hit. What makes the Mustang story unusual is the optics: the most divisive naming decision in Ford's modern history, attaching the Mustang badge to an electric crossover that Mustang buyers largely despised, had produced a vehicle that was outselling the original. Until the subsidy disappeared.
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The longer question is what this says about EV demand without government support. The optimistic reading is that this is a temporary shock: buyers who would have purchased in Q1 2026 pulled their purchases into Q3 2025 to catch the credit, creating an artificial trough. The pessimistic reading is that a significant portion of American EV demand was subsidy-dependent from the start, and that without a $7,500 discount the value proposition for many buyers does not close the gap against a petrol alternative.
The ZEV mandate debate that MotorBuzz has been tracking in the UK, most recently in our February registration data coverage, turns on exactly this question. The SMMT's argument to government is that manufacturers cannot sustain EV investment indefinitely against demand that is not growing fast enough without policy support. The US data, with $7,500 credits in place, produced strong demand numbers. With $7,500 credits gone, the Mustang Mach-E dropped 70.5 per cent in a single month.
Whether that is a temporary rebalancing or a structural ceiling is the question 2026 will answer. In January at least, the answer was clear. The petrol Mustang won.
Sources: CarBuzz, February 2026 | Motor1, February 2026 | Carscoops, December 2025 | CarBuzz full year 2025 Mustang | EV.com Q3 2025 | MachEforum November 2025 | MotorBuzz UK ZEV mandate