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<\/p>\n\n Third quarter sales are expected to get a big boost from EVs and the expiring tax credit <\/p>\n
September 29, 2025 at 19:01<\/p>\n
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The economy continues to show signs of turbulence as inflation is up and the unemployment rate climbed to 4.3% last month. These factors helped to push the Federal Reserve to lower interest rates.<\/p>\n
While the Fed noted \u201cuncertainty about the economic outlook remains elevated,\u201d that hasn\u2019t scared off car buyers. Quite the opposite as Edmunds<\/a> expects this will be the strongest third quarter for new vehicle sales since 2019.<\/p>\n More: Americans Crushed By Auto Loans As Defaults And Repossessions Surge<\/a><\/strong><\/p>\n If their projections pan out, Americans will have snapped up 4,075,132 new vehicles between July and September. That would be a 4.7% increase from last year, but a 3.3% drop from the second quarter.<\/p>\n An EV Slowdown Ahead?<\/strong><\/p>\n That sounds like a mixed bag, so what\u2019s driving the sales? Edmunds pointed to a number of factors including the elimination of the clean vehicle tax credit. It expires tomorrow<\/a>, meaning shoppers have rushed out to buy EVs before the $7,500 incentive disappears.<\/p>\n
That isn\u2019t the only tailwind as the rate cut appears to have helped and Jessica Caldwell, Edmunds\u2019 head of insights, noted \u201cWe\u2019re seeing more consumers return to the market with aging trade-ins, which is a strong signal that there\u2019s still real pent-up demand.\u201d<\/p>\n However, the party is going to come to an abrupt end once the clean vehicle tax credit expires. Edmunds\u2019 director of insights, Ivan Drury, suggests there will be an \u201cEV hangover in the months ahead.\u201d That\u2019s an understatement as the elimination of the incentive will likely push some consumers to cheaper gas and hybrid vehicles.<\/p>\n
Automakers have already alluded to this and GM\u2019s Duncan Aldred recently said<\/a>, \u201cThere\u2019s no doubt we\u2019ll see lower EV sales next quarter \u2026 and it may take several months for the market to normalize.\u201d He added, we will \u201calmost certainly see a smaller EV market\u201d and the company will respond by cutting production.<\/p>\n
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