On the Dash:
- U.S. new-vehicle sales in August are forecast at a 16 million pace, up from last year but slightly below July.
- EV demand is driving sales as buyers rush to secure federal tax credits expiring at the end of September.
- Cox Automotive expects sales to slow in the fourth quarter as tax credits end, prices rise, and inventory tightens.
U.S. new-vehicle sales are forecast to remain strong in August, with Cox Automotive projecting a seasonally adjusted annual rate of 16 million vehicles. While this is slightly below July’s pace of 16.4 million, it represents a significant increase from the 15.1 million level recorded a year ago. Sales volume for the month is expected to reach 1.46 million units, up nearly 4% from July and 2.3% higher than last August.
Electric vehicle demand played a key role in August’s sales strength as consumers rushed to take advantage of federal tax credits set to expire at the end of September. EV sales surged in July, reaching over 130,000 units —a 26% month-over-month increase and a nearly 20% year-over-year rise. That momentum is expected to carry through August, with 11 brands already reporting record EV sales this summer.
Industry analysts attribute the solid sales environment to a combination of strong consumer confidence, steady employment, and muted price inflation despite tariff concerns. Incentives, particularly on EV models, reached record highs in July and continued to support sales activity in August. An additional sales day compared to July also contributed to the month’s projected increase.
Looking ahead, Cox Automotive warns that the pace of new-vehicle sales is likely to cool in the fourth quarter. With the federal tax credit deadline approaching, EV demand is expected to decline sharply beginning in October. At the same time, higher prices, tightening inventories, and an increase in tariffed products entering the market could pressure overall sales.
Economic conditions may also weigh on future demand. While Federal Reserve officials have signaled the possibility of a rate cut as early as September, auto loan rates are tied to long-term Treasury yields, which are not expected to shift significantly in the near term. Cox Automotive expects meaningful relief in borrowing costs to arrive closer to 2026.
The firm will revisit its 2025 outlook in its September update; however, for now, the full-year forecast remains within the range of 15.6 million to 16.3 million vehicles, with a baseline of 15.7 million.
