On the Dash:
- July new-vehicle sales are projected to reach 1.42 million units, with a 16.9 million SAAR, the highest pace of 2026.
- Hybrid demand continues to climb while EV sales soften after the end of federal tax credits.
- Higher incentives and easing loan rates are helping offset affordability challenges.
Last week, JD Power and GlobalData released their July 2026 Automotive Forecast, which expects new-vehicle sales to increase in July despite ongoing affordability concerns.
While JD Power projects total July sales will reach 1,415,800 units, up 1.4% year over year, the seasonally adjusted annual rate (SAAR) will hit 16.9 million units, the highest pace recorded so far this year. According to the forecast, retail sales alone will total 1,193,500 units, a 0.9% increase from July 2025.
JD Power President of OEM Solutions Thomas King said demand remains strong despite higher fuel prices, economic uncertainty and affordability pressures.
EV demand cools
With the end of the federal tax credit shifting consumer demand toward hybrid vehicles, JD Power expects hybrids to account for 15.9% of July retail sales, which is up 2.5 percentage points from last year. Meanwhile, the agency projects EV market shares will fall to 7% as incentive spending on EVs declines.
Additionally, manufacturers are also increasing discounts on gas-powered and hybrid vehicles. Therefore, JD Power expects average incentive spending to reach $3,451 per vehicle, up 8.1% year over year, while EV incentives will decline 7% to $10,092 per vehicle.
Financing conditions continue to improve, but rising vehicle prices and weaker trade-in values are keeping monthly payments elevated. The company also expects the average new-vehicle loan rate to decline to 6.54%, the lowest July reading since 2022. However, the average transaction price will rise to $45,369, while the average monthly payment will reach a record $808 for July, JD Power forecasts.
Negative equity also remains a concern, as JD Power expects 29.4% of trade-ins to carry negative equity, up 1.1 percentage points from a year ago. Additionally, the company projects retail consumer spending will reach a record $51.8 billion for the month, an increase of $1.2 billion from July 2025.
Global outlook remains cautious
Conversely, GlobalData expects worldwide light-vehicle sales to remain under pressure during the second half of the year.
The firm forecasts July global sales of 7.3 million units, down 2.4% year over year, while reducing its full-year 2026 forecast to 89.7 million vehicles. Analysts cited continued weakness in China, geopolitical uncertainty and rising energy costs as key risks to global demand.
