On the Dash:
- BEV sales dropped 46.7% month-over-month in October after federal EV tax credits expired.
- Incentives rose to $13,161 per unit, partially offsetting the decline, but uncertainty remains.
- Full-year 2025 sales are expected to be flat or slightly higher than 2024, despite a slower Q4.
New light-vehicle sales in October 2025 recorded the lowest seasonally adjusted annual rate (SAAR) in 15 months, according to the National Automobile Dealers Association. The October SAAR of 15.3 million units represents a 4.8% decline year-over-year and a 5.9% drop from September 2025. The decrease was primarily driven by a sharp decline in battery-electric vehicle (BEV) sales following the expiration of federal EV tax credits on September 30.
BEVs accounted for just 5.9% of total new-vehicle sales in October, falling from a record 11.3% in September. Approximately 75,000 BEVs were sold, a 46.7% decrease from September and down 23.8% year-over-year. Automakers had pulled forward many EV purchases ahead of the credit’s expiration, which contributed to the steep drop in October.
To offset the loss of the federal incentive, several OEMs increased their own discounts. Average incentive spending on BEVs rose $2,047 from September to $13,161 per unit, according to J.D. Power. While these incentives softened the decline, it remains uncertain how quickly BEV sales will return to previous levels without federal support.
Industry analysts expect the slower sales pace to continue through the fourth quarter of 2025 compared with the third quarter. However, earlier “pull-ahead” sales this year suggest full-year totals will remain largely stable. Overall, 2025 new-vehicle sales are expected to finish flat or slightly higher than 2024.
The October results highlight the strong influence of federal incentives on EV adoption. BEV sales surged when credits were available, but the market remains sensitive to policy changes. Automakers may continue to rely on manufacturer incentives to sustain EV demand, and dealers may need to adjust strategies to navigate shifts in consumer behavior.
