The US auto market roared back to life in 2024, with new-car sales reaching their highest level since 2019, fueled by a combination of replenished inventories and enticing incentives.
Analysts estimate that sales will surpass 15.8 million vehicles, marking a significant rebound from the pandemic lows.
This strong performance saw General Motors defend its title as the top seller in the US market, showcasing the resilience of the American consumer.
Strong sales fueled by discounts and inventories
“It’s been a volatile year for the new-vehicle market, but it is expected to finish on a high note,” Charlie Chesbrough, senior economist at Cox Automotive, told Reuters.
The strong sales were supported by what GM Chief Financial Officer Paul Jacobson called a “remarkably” resilient consumer.
GM’s sales are estimated to be near 2.7 million for the year, according to Cox analysts.
Automakers are set to report their final sales figures throughout Friday, which will confirm the overall trends.
Mixed results for automakers
While most major automakers experienced a positive year, Stellantis, the maker of Jeep and Ram vehicles, and electric vehicle giant Tesla did not achieve year-over-year sales gains like their competitors.
Stellantis faced a challenging year, with sales of its popular Ram, Jeep, and Dodge brands all declining.
The French-Italian automaker also grappled with the fallout from an aggressive pricing strategy, which ultimately led to the abrupt departure of former CEO Carlos Tavares.
Tesla, on the other hand, experienced slowing sales due to its aging lineup and increased competition in China, a crucial market for the company led by Elon Musk.
Electric vehicle sales gain momentum
US sales of electric vehicles (EVs) are expected to approach 1.3 million, accounting for roughly 8% of all new vehicles purchased in 2024, according to Cox.
This marks a slight increase from 2023, when US drivers bought 1.2 million EVs, which comprised 7.6% of all sales.
The fourth quarter may have seen a surge in EV purchases as buyers scrambled to take advantage of EV tax credits, which could potentially disappear under Republican President-elect Donald Trump.
The policies of the incoming Trump administration are likely to impact auto sales in 2025 and beyond, particularly if the incoming president acts on plans to roll back Democratic President Joe Biden’s EV policies, as well as increase tariffs on imports from Mexico and Canada.
Incentives ease sticker shock
Shoppers also benefited from increased vehicle discounts this winter, according to J.D. Power.
The average incentive spend per vehicle is expected to have grown 30.7% from December 2023 to December 2024, reaching $3,442. Analysts expect this positive momentum to continue into the new year.
“As the positive trends of 2024 continue into 2025, improved overall inventory and greater availability of affordable vehicles are expected to sustain sales momentum,” said Thomas King, president of the data and analytics division at J.D. Power, in a statement.
Cox analysts forecast new-vehicle sales to grow approximately 3% in 2025, indicating a continued, if more moderate, period of growth.
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