New light-vehicle sales finished 2024 strong, leading to a full-year sales total of 15.85 million units—an increase of 2.2 percent compared to 2023, according to the National Automobile Dealers Association (NADA). And industry experts expect continued growth in 2025.
The December 2024 seasonally adjusted annual rate (SAAR) reached 16.8 million units, the highest monthly SAAR since May 2021 with 17.0 million units. NADA officials noted new light-vehicle sales accelerated following the election in November 2024 and were strong through the remainder of the year. Sales last October, November and December 2024 totaled 4.19 million units, an increase of 7.7 percent compared to the same time in 2023.
NADA’s Chief Economist Patrick Manzi wrote that “significant drivers of the sales gain included higher OEM incentives and increased vehicle availability.”
Less Incentives in 2025
New light-vehicle inventory on the ground and in transit for December 2024 totaled 2.79 million units, down 5.9 percent compared to the beginning of the month but up by 21 percent year-over-year.
As new light-vehicle inventory increased through 2024, so did OEM incentives. NADA officials cited J.D. Power’s estimate that the average incentive spending per unit in December 2024 was $3,442, an increase of $809 year over year.
“We expect new light-vehicle production to slow somewhat in 2025, which will limit inventory growth and keep inventory levels just below 3 million units for most of the year,” wrote Manzi
EV Market
All segments of alternative-fuel vehicles posted year-over-year sales and market-share gains as alternative-fuel vehicles represented 20.0 percent of all new vehicles sold. Conventional hybrids had the largest increase in market share, rising to 10.1 percent from 7.6 percent 2023.
Plug-in hybrids (PHEV) and battery electric vehicles (EV) gained market share, but to a lesser extent. PHEV market share rose a tenth of a percentage point to 2.0 percent in 2024 from the previous year, The EV market share rose to 7.8 percent in 2024 from 7.5 percent in 2023.
EV sales reached a record 1.24 million units, an increase of 6.8 percent from the previous year. The share of EVs sold by franchised dealers increased as well, with franchised dealers selling nearly 599,000 EVs—48.1 percent of all EVs sold.
“We expect franchised dealers to capture an even larger share of the BEV market in 2025,” wrote Manzi.
A New Year
NADA official noted there will be “challenges” for the U.S. auto industry, mostly stemming from actions in Washington.
“A proposed rollback or elimination of the consumer-facing electric vehicle tax credits will likely slow EV adoption and limit sales growth,” wrote Manzi. “The Fed has signaled it will slow the cadence of cuts to the federal funds rate. Interest rates declined slightly during the final quarter of the year, which contributed to the strong sales pace in Q4”.
Despite those concerns, NADA is projecting another strong year for new-vehicle sales in the U.S.
“Our outlook is positive,” wrote Manzi. “We expect continued growth in vehicle sales in 2025. Our forecast for new light-vehicle sales in 2025 is 16.2 million units, an increase of roughly two percent compared to 2024.”
