U.S. New Vehicle Sales Forecasted to Grow by 1% in 2024

Reuters – Wednesday, December 13, 2023, 7:15 PM GMT+2

Car shopping website Edmunds predicts a modest 1% increase in U.S. new vehicle sales for 2024, reaching 15.7 million units. Despite an improvement in vehicle supply, the forecast takes into account potential pressure on demand due to persistently high interest rates.

Electric Vehicle Market Share Expected to Reach 8% in 2024

Edmunds anticipates a slight rise in electric vehicle (EV) market share, reaching 8% of total new vehicle sales in 2024, compared to 6.9% recorded in the year through November 2023. The growth in EV adoption is influenced by an evolving market and consumer preferences.

Conflicting Market Dynamics Anticipated in 2024

Jessica Caldwell, Head of Insights at Edmunds, highlights the conflicting market dynamics expected in 2024. While increased inventory and enticing deals may attract consumers, the persistence of high interest rates from 2023 may impact purchasing decisions and create challenges in the automotive market.

Automakers Report Strong Sales Despite Challenges

Despite market uncertainties, automakers like General Motors and Toyota Motor report robust new vehicle sales in the current year. Improved demand and resolving supply-chain issues have enabled these companies to ship more units to dealers, demonstrating the resilience of the automotive industry.

Peak in New Vehicle Pricing, Focus Shifts to Incentives

Edmunds notes that its data suggests a peak in new vehicle pricing. Improved inventory levels have reintroduced incentives into the market. However, the report emphasizes that more affordable vehicle models are selling faster than their higher-priced counterparts, presenting challenges for shoppers seeking budget-friendly options.

Hybrids Preferred Over Full Electric Vehicles

The transition to fully electric vehicles (EVs) has slowed, with hybrids becoming the more favored choice among Americans seeking electrified options. Edmunds identifies hybrids as a comfortable and popular alternative, signaling a pragmatic approach among consumers despite the broader push towards EVs.

Reporting by Abhinav Parmar in Bengaluru; Editing by Shilpi Majumdar