J.D. Power–GlobalData October 2025 Automotive Forecast: Sales Slide as EV Incentives Expire and Consumer Affordability Tightens
The U.S. automotive market saw a notable cooling in October 2025 as total new-vehicle sales declined year over year, signaling a recalibration following September’s surge in electric vehicle (EV) purchases driven by expiring federal incentives. According to the latest joint forecast from J.D. Power and GlobalData, total new-vehicle sales—including retail and fleet transactions—are expected to reach 1,249,800 units, representing a 6.9% decrease compared with October 2024.
Despite the year-over-year decline, October’s selling calendar remains consistent with last year at 27 selling days. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is projected at 15.1 million units, down from 16.2 million in October 2024 and 16.3 million in September 2025, highlighting a measurable slowdown in momentum as the industry adjusts to shifting EV dynamics and affordability pressures.
Retail Sales Forecast: Moderate Decline as Affordability Remains a Challenge
New-vehicle retail sales are forecast to total 1,051,400 units, a 5.9% drop compared with October 2024. While demand for internal combustion engine (ICE) vehicles remains resilient, overall consumer purchasing power has been constrained by persistently high transaction prices, record-high monthly finance payments, and limited incentives.
According to Thomas King, president of the data and analytics division at J.D. Power, the decline in October was both expected and largely driven by timing distortions created by the expiration of EV tax credits.
Thomas King: “October Reflects the Hangover After September’s EV Rush”
October’s results reflect a notable, but expected decline in the new-vehicle sales pace, due almost entirely to sales of electric vehicles,” King said.
He explained that the expiration of the federal EV credit on September 30 prompted a wave of early purchases in the prior month, as consumers rushed to take advantage of the incentive before it expired. This led to a record-high EV share of 12.9% of retail sales in September, compared with just 8.5% a year earlier.
As a result, the industry is now experiencing the downside of that pull-forward demand. In October, EVs are expected to represent only 5.2% of new-vehicle retail sales, accounting for 1.0 million of the 1.2 million-unit decline in the overall industry sales pace from September.
Manufacturers Counter With Discounts—but Price Pressures Persist
King noted that while EV demand has fallen sharply, the decline could have been even steeper if not for automaker actions to restore affordability.
Multiple manufacturers have responded by reducing EV prices and increasing discounts to offset the loss of the federal credit,” he said. “These efforts are helping sustain some EV Automotive demand and preventing a deeper market contraction.”
At the same time, non-EV vehicles are facing their own headwinds, including elevated transaction prices and restrained incentive levels. The average monthly finance payment in October reached $758, the highest ever recorded for the month. To manage rising costs, more consumers are extending loan terms—84-month loans now account for 11.8% of financed sales, the second-highest October level on record.
Transaction Prices and Incentives: EV Mix Shifts Impact the Averages
The changing sales mix has reshaped the market’s pricing landscape. The average new-vehicle retail transaction price for October is projected at $46,057, a 2.2% increase from October 2024. However, average manufacturer incentive spending per vehicle fell to $2,674, down $540 from September and $444 year over year. Incentives now represent 5.3% of the average MSRP, a full percentage point lower than a year earlier.
This decline, King said, is “almost entirely due to reduced EV sales,” since EVs historically carry much higher discounts than non-EVs.
Even though EV sales volumes are lower, discounts on EVs have surged—averaging $13,161 per vehicle, up $2,211 from October 2024 and $2,047 from September 2025—as manufacturers attempt to fill the gap left by the expired federal credit. In contrast, non-EV Automotive discounts fell to $2,423, down $282 year over year.
While this mix shift hurts overall revenue, Automotive it actually boosts profitability, as more non-EVs—typically higher-margin products—make up a greater share of sales.
Affordability, Interest Rates, and Trade-In Trends
Interest rates are slowly easing, offering modest relief to consumers. The average new-vehicle loan rate fell to 6.56%, down 14 basis points from a year ago.
Used-vehicle pricing also remains robust, with the average used-vehicle price trending at $29,446, up $473 year over year. Limited supply of newer used models—owing to reduced new-Automotive vehicle production during the pandemic and fewer lease maturities—continues to support used prices.
These trends benefit consumers trading in their old vehicles: average trade-in equity rose to $8,378, up $386 from October 2024. However, Automotive higher outstanding loan balances mean 26.6% of trade-ins carry negative equity, a 2.2-point increase from last year.
Overall, consumers are expected to spend $46.1 billion on new vehicles in October, 4.2% less than a year ago.
Retailer Profitability: Higher Margins Amid Lower Volumes
Even with softer sales, retailers are maintaining strong per-unit profitability. Total retailer profit per unit, including vehicle gross and finance & insurance (F&I) income, is projected at $2,295, up $97 year over year and $137 month over month.
The total aggregate retailer profit from new-vehicle sales is forecast at $2.3 billion, down 2.1% from October 2024. The decline reflects lower sales volumes, partially offset by the improved profit margins on non-EV vehicles.
Holiday Promotions and Tariff Uncertainty
As the industry heads into November, manufacturers are preparing for the traditional holiday sales season, typically characterized by increased promotional activity and enhanced lease offers.
However, King cautioned that upcoming lease maturities are Automotive significantly lower than in prior years—down 15% from 2024 and nearly 48% from 2023—which may dampen lease-driven demand.
“Throughout 2025, manufacturer incentive spending has been restrained,” King noted. “As automakers balance profitability with volume, the Automotive trajectory of sales will depend on how aggressively they choose to stimulate demand—especially during the holiday sales period. For now, most indicators point to relatively conservative strategies for the balance of the year.”
Sales and SAAR Comparison: Key Metrics
| Metric | October 2025 | September 2025 | October 2024 |
|---|---|---|---|
| Retail Sales | 1,051,414 (-5.9% YoY) | 1,055,975 | 1,117,265 |
| Total Sales | 1,249,826 (-6.9% YoY) | 1,244,416 | 1,343,033 |
| Retail SAAR | 12.7 million | 14.1 million | 13.5 million |
| Total SAAR | 15.1 million | 16.3 million | 16.2 million |
October 2025 figures are based on the first 16 selling days of the month (27 selling days total, same as October 2024).
Additional Market Insights
- Fleet sales: 198,412 units (-12.1% YoY), accounting for 15.9% of total light-vehicle sales.
- Powertrain mix: ICE vehicles 79.2% (+2.4 pts YoY); PHEVs 1.0% (-1.4 pts); EVs 5.2% (-3.4 pts); HEVs 14.2% (+2.0 pts).
- U.S. final assembly share: 56.7% of total sales (+5.5 pts YoY).
- Trucks/SUVs: 82.3% of retail sales (+1.3 pts YoY).
- Inventory: 2.27 million units (+11.5% YoY); days’ supply: 61 days (up from 59).
- Leasing: 20.5% of sales (-2.7 pts YoY).
- Average time on dealer lot: 49 days (down from 50).
- Vehicles sold in under 10 days: 29.3% (-1.8 pts).
Electrification Outlook: EV Market Recalibrates Post-Tax Credit Expiration
Tyson Jominy, senior vice president of data & analytics at J.D. Power, said October marks a turning point for the EV market following the end of federal tax credits.
The automotive industry is experiencing a significant recalibration in the electric vehicle segment,” Jominy explained. “October EV Automotive market share declined to 5.2%, less than half of September’s 12.9%, signaling a notable shift in consumer demand.”
Plug-in hybrids (PHEVs) experienced the sharpest decline, dropping nearly 60%, from 2.2% in September to just 1.0% in October. In contrast, traditional hybrids (HEVs) are gaining ground, with market share rising to 14.2%, up 2.0 points year over year, near an all-time high.
While hybrid growth is encouraging, the recent EV correction underscores a key lesson,” Jominy added. “Consumers value choice. A Automotive diversified powertrain strategy—offering EVs, hybrids, plug-in hybrids, and ICE options—will be essential to meeting evolving consumer needs.”
Global Sales Perspective: Resilience Amid Regional Divergences
David Oakley, manager of Americas vehicle sales forecasts at GlobalData, provided context on the broader global market.
September global light-vehicle sales rose 6.9% year over year to 8.1 million units,” Oakley said. “China, the United States, and Europe all delivered solid growth, while Japan posted a modest decline.”
The global selling rate reached 94.5 million units in September, down slightly from 95.4 million in August. China continues to dominate global volume, Automotive supported by government trade-in programs, even as authorities move to curb excessive discounting amid a price war.
For October 2025, GlobalData expects global light-vehicle sales to decline 2.3% from a year earlier, driven primarily by weakness in North America and the CIS (Commonwealth of Independent States). Russia remains constrained by tightening auto financing conditions.
The global selling rate is projected at 91.3 million units, down from 93.8 million units in October 2024.
Trade tensions between the Automotive U.S. and China are flaring again, especially over rare earth mineral exports,” Oakley noted. “However, sustained government support in China and stronger-than-expected results in Europe have prompted upward revisions to our global forecast.”
GlobalData now projects total 2025 global light-vehicle sales at 91.2 million units, reflecting 2.7% year-over-year growth.
A Market in Transition
The October 2025 forecast from J.D. Power and GlobalData paints a picture of an automotive market in flux—caught between shifting EV economics, tightening affordability, and evolving consumer preferences.
While the expiration of EV Automotive tax credits has triggered a short-term pullback in electric vehicle sales, automakers’ responses—through price cuts and expanded hybrid offerings—are helping to stabilize the market. Meanwhile, profitability remains healthy even as total volume dips, thanks to stronger margins on non-EV models.
