On the Dash:
- More than 130,000 EVs remain unsold, prompting manufacturers to offer incentives, leasing programs, and discounts.
- Overall vehicle sales remain strong, with GM, Ford, Toyota, Lexus, and Honda posting year-to-date gains driven by hybrids, electrified vehicles, trucks, and SUVs.
- Automakers are investing in lower-cost EV production and multi-powertrain strategies to sustain long-term growth amid high EV prices and shifting consumer demand.
U.S. automakers are adjusting their strategies following the expiration of the federal tax credit this week, which has left dealers with approximately 134,000 unsold EVs across the country. Previously, this incentive fueled a surge in battery-powered vehicle sales, pushing EVs to account for 12.2% of retail sales in September, a 2.6 percentage point increase from a year earlier, according to J.D. Power.
Executives anticipate a significant drop in EV market share through the end of 2025. To counter this decline, manufacturers are strategically introducing a variety of incentives and leasing programs. For example, Hyundai is offering discounts of up to $9,800 on the 2026 Ioniq 5 models, while Ford plans to implement competitive lease payments to sustain demand.
Q3 sales results
Despite the uncertainty surrounding EVs, overall U.S. vehicle sales remain robust. In fact, General Motors reported an impressive 8% increase in third-quarter sales, bringing year-to-date deliveries to 2.2 million vehicles, the fastest pace in a decade. Notably, GM recorded 66,501 EV deliveries in Q3 and a total of 144,668 year-to-date, which is more than double compared to last year. Notably, the Chevrolet Equinox EV emerged as the leader in non-Tesla EV sales, while Cadillac secured three models among the top ten luxury EVs.
Similarly, Ford sold 545,522 vehicles in Q3, marking an 8.2% rise, which included a record 85,789 EVs, nearly 20% higher than the previous year. The F-150 Lightning also set a record in Q3 with 10,005 units sold, and the Mustang Mach-E reached 20,177 units, reflecting a 50% increase. Additionally, SUVs and trucks contributed to growth, with notable gains seen in the Expedition, Explorer, and Bronco models.
Meanwhile, Toyota and Lexus reported September sales of 185,748 vehicles, representing a 14.2% increase, with electrified models comprising 45.8% of their monthly volume. Specifically, sales in the Toyota division rose by 13.4%, while Lexus saw a 19.4% increase. On the other hand, American Honda maintained a 3.9% year-to-date rise, with hybrids such as the CR-V, Accord, and Civic, along with the Prologue EV, achieving record sales despite facing limited inventory.
Future outlook
Nonetheless, high prices for EVs continue to present challenges for consumer adoption. For instance, in August, the average EV sold for over $57,000, more than $9,000 higher than comparable gas-powered vehicles, according to Cox Automotive. In response, automakers are investing in lower-cost production methods to sustain growth, including Ford’s $2 billion overhaul of its Louisville, Kentucky, plant, which aims to produce an EV pickup priced at $30,000 by 2027.
While EV sales are expected to slow, hybrids and electrified vehicles are projected to continue driving growth. Upcoming releases, such as Ford’s Explorer Tremor and F-150 Lobo, Toyota’s next-generation RAV4, and Honda’s refreshed Integra, highlight the ongoing innovation and expansion across various powertrains, ensuring a dynamic future for the industry.
