Economic Context and Impact on the Car Market
The economic situation remains tense: inflation is rising, and the unemployment rate last month reached 4.3%. These factors prompted the US Federal Reserve to lower interest rates.
Although the Fed notes that “uncertainty about economic prospects remains high,” this has not deterred car buyers. On the contrary, according to Edmunds, this quarter will be the most successful for new car sales since 2019.
If the forecasts hold true, Americans will purchase 4,075,132 new cars from July through September. This is 4.7% more than last year, but 3.3% less compared to the second quarter.
The Future of Electric Vehicles and Market Implications
What is driving sales? Experts point to a number of factors, including the cancellation of the clean vehicle tax credit, which expires tomorrow. This has forced buyers to rush to purchase electric vehicles before the $7,500 incentive disappears.
In addition, the lowering of interest rates has also contributed to market activity. Jessica Caldwell, head of insights at Edmunds, noted:
We are seeing more consumers returning to the market with aged trade-ins, which is a powerful signal of pent-up demand.
However, this sales boom could come to an abrupt halt after the tax credit expires. Ivan Drury, director of insights at Edmunds, suggests that
we are in for a ‘hangover’ in the electric vehicle market in the coming months.
This is an understatement, as the removal of the incentive will likely push some consumers towards gasoline and hybrid cars, which are cheaper.
Automakers have already mentioned this. Duncan Aldred from General Motors recently stated:
Undoubtedly, we will see lower electric vehicle sales next quarter… and it may take several months for the market to stabilize.
He added that we
will almost certainly see a smaller EV market
, and the company will respond to this by reducing production.
Forecasts for Individual Automakers
The actual numbers will be known soon, but Edmunds expects Toyota to benefit from a 17% sales increase in the third quarter compared to last year. Hyundai and Kia may increase their figures by 12.7%, and Ford by 8.0%.
However, not all manufacturers will show positive dynamics. Stellantis is likely to record a slight decline of 0.3%, becoming the only major automaker in Edmunds’ forecast with a decrease compared to last year.
Sales Volume Forecast Table
| SALES VOLUME | 25 Q3 Forecast | 24 Q3 Sales | 25 Q2 Sales | Change vs 24 Q3 | Change vs 25 Q2 |
|---|---|---|---|---|---|
| GM | 710,824 | 659,780 | 746,756 | 7.7% | -4.8% |
| Toyota | 635,390 | 542,957 | 666,477 | 17.0% | -4.7% |
| Ford | 544,530 | 504,047 | 612,126 | 8.0% | -11.0% |
| Hyundai/Kia | 483,810 | 429,361 | 473,283 | 12.7% | 2.2% |
| Honda | 366,751 | 366,214 | 387,574 | 0.1% | -5.4% |
| Stellantis | 305,912 | 306,925 | 310,760 | -0.3% | -1.6% |
| Nissan | 225,108 | 212,068 | 222,210 | 6.1% | 1.3% |
| Industry Total | 4,075,132 | 3,892,304 | 4,212,596 | 4.7% | -3.3% |
Overall, the current sales growth may be a temporary phenomenon linked to government incentives. The future market dynamics will largely depend on how automakers adapt to the new conditions, including by adjusting production and offering more affordable models, especially in the electric vehicle segment. The experience of recent years shows that sharp changes in regulation often lead to fluctuations that can last for several quarters.