A new J.D. Power and GlobalData study forecasts that the market share of new electric vehicles in the US market will decline to 5% in October, after reaching a record 12.9% share in September.
The surge in EV demand ahead of the federal tax break deadline on September 30 led the segment to register its highest share ever across all powertrains.
J.D. Power estimates that electric vehicles will have accounted for just 5.2% of the market in October, a 59.7% plunge from September and 39.5% decline from a year earlier.
The estimates are based on data from the first 16 selling days of October, which has 27 selling days.
According to Thomas King, president of the data and analytics division at J.D. Power, “October’s results reflect a notable, but expected decline in the new-vehicle sales pace, due almost entirely to sales of electric vehicles.”
“Now that the federal EV credit has expired [on September 30], the industry is dealing with the consequences of those accelerated purchases,” King stated.
The data showed that changes in the electric vehicle segment have also affected average transaction prices and average incentive spending.
Average manufacturer incentives are projected at $2,674 per vehicle, down $540 from September and $444 from last year.
Meanwhile, incentive spending was 5.3% of the Manufacturer’s Suggested Retail Price (MSRP), about one percentual point lower than a year before.
At the same time, discounts on electric vehicle purchases have increased, despite the federal tax credit expiry, as manufacturers stepped in to replace the government incentive.
In October, the average new-vehicle price is expected to be $46,057, up $994 (2.2%) from October 2024.
Consumers are expected to spend nearly $46.1 billion on new vehicles this month, 4.2% less than a year ago.
A lower electric vehicle market share is expected to boost overall margins, because EVs typically generate smaller retailer profits than non-EVs.
As a result, average retailer profit per vehicle is projected at $2,295, up $97 from a year ago and $137 above September.
However, the total profit from new-vehicle sales is expected to decline by 2.1% year over year — staying at $2.3 billion.
The analyst noted that “the industry continues to navigate a complex mix of tariff-related cost pressures, challenging consumer affordability and EV-related disruption.”
King emphasized that, entering November, manufacturers face a choice: stimulate demand aggressively or stay cautious as the year wraps up.
“Manufacturers are weighing profitability against volume, and sales will depend on how aggressively they try to boost demand,” he said. “For now, most signs point to conservative strategies through the end of the year.”
The firm projects that retail vehicle sales will reach 1,051,400 vehicles across all powertrains in October, representing a 5.9% decrease year over year.
Both fully electric vehicles and plug-in hybrid vehicles (PHEV) are facing the steepest declines in October, while traditional hybrid models (HEV) saw their market share jump to 14.2% year over year.
Tyson Jominy, J.D. Power’s Senior VP of Data & Analytics, noted that “while hybrid growth is encouraging, the recent EV market correction underscores a critical lesson: consumers prefer having access to a range of powertrain options that deliver comparable value.”
According to Jominy, a “diversified strategy that embraces multiple powertrain solutions will be essential to meeting evolving consumer preferences.”
