By Gabrielle Coppola, David Welch and Keith Naughton | Bloomberg
The threat by President-elect Donald Trump to end tax credits for electric vehicles helped lift sales in the fourth quarter, giving US automakers a much-needed boost after a disappointing year.
At General Motors Co., EV sales more than doubled to almost 44,000 in the quarter. Ford Motor Co. saw a 16% jump in the category to about 30,000 vehicles. Overall EV sales gained 12%, pushing the full-year total to a record 1.3 million, according to forecasts from researcher Cox Automotive.
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The strength in EVs helped push total car sales up from the year prior. The annualized rate for 2024 rose to 15.9 million cars, based on the average forecast of four researchers, up from 15.5 million a year ago.
This EV surge isn’t expected to last into 2025. The results of the US presidential election encouraged buyers holding out for deals to make purchases before potential policy changes championed by Trump make electric options more expensive.
Only a quarter of new-car shoppers are considering an EV for their next purchase, down two percentage points from a year ago, according to JD Power.
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“Threats and worries” contributed to a “sense of urgency to buying,” Jonathan Smoke, Cox’s chief economist, said on a December call with reporters. “That’s true in overall purchase activity, and it’s also very much true to the EV story.”
Trump made repealing federal policies meant to boost US EV sales a key part of his campaign, railing against what he called President Joe Biden’s “insane electric vehicle mandate.” Advisers to his transition team have recommended cutting the $7,500 tax credit on plug-in vehicles, which would make the already expensive vehicles even further out of reach for US consumers. The president-elect has also threatened tariffs on Canada and Mexico — both tightly integrated into the US auto supply chain — which could also drive up the price of cars.
Electric vehicle startup Rivian Automotive Inc. said it produced 12,727 vehicles and delivered 14,183 vehicles during the quarter, down from production of 17,541 vehicles and sales of 13,972 vehicles during the same period in 2023. Rivian’s full-year sales of 51,579 rose slightly from 50,122 in the prior year.
Sales of Ford’s electric Mustang Mach-E jumped 36% in the final three months of the year, helping to offset a 10% decline in deliveries of the F-150 Lightning plug-in pickup truck. Ford halted production of the Lighting at the end of last year to reduce inventory and losses. Total F-Series pickup truck sales, including gas-fueled models, rose 21% in the quarter.
Tesla Inc. is still the sales leader in EVs by far, but experienced its first annual sales drop in more than a decade last year despite reporting record fourth-quarter deliveries. Meanwhile, electric compact and mid-size SUVs from GM, Honda, Hyundai and Kia attracted more shoppers in December, according to JD Power.
Free Chargers
On average, EV buyers got a $5,600 rebate per car with the current tax credit, JD Power figures show. Without that kind of incentive, demand could plunge as much as 27%, according to economists. Ford extended a promotion through the first quarter of free home chargers and installation to buyers of its EVs, which it credited for the late-year surge in battery powered models.
While some carmakers, like GM and Hyundai, have pledged to push ahead with EV offerings regardless of policy changes, others have delayed EV plans to prioritize hybrids, which saw outsized growth in 2024. Stellantis said last month it would delay launching its all-electric Ram a year in favor of an extended-range version. Hyundai said it would double its hybrid lineup and Ford has pledged to offer hybrid versions of all its models by 2030 after slashing prices on its EVs and postponing new electric models.
Automakers that take that “basket approach” will come out on top in 2025, GlobalData’s Schuster said. “If you have a full lineup of options, that’s who wins.”
As for the overall new car market, lower interest rates, rising manufacturer incentives and fading anxiety around the election drew more buyers, prompting analysts to raise full-year sales forecasts. Earlier in the year, inflation and a cyberattack on car dealerships had dimmed the sales outlook for 2024.
General Motors was likely the biggest automaker in the US by sales last year, delivering 2.7 million cars, followed by Toyota Motor Corp., Ford Motor Co., Hyundai Motor Co. and Honda Motor Co., according to company statements and data from Cox.
Stellantis NV, which has been plagued by product launch delays and bloated inventories that led to the ouster of its CEO last year, fell to sixth place with a 15% plunge in deliveries, Cox forecast.
In the fourth quarter, General Motors posted growth of 21%, trailed by Honda at 9% and Ford with 8.8%. Meanwhile, Toyota said US sales fell 2.7% during the period.
Affordability is keeping car sales of all kinds below pre-pandemic levels, according to Jeff Schuster, GlobalData’s vice president of automotive research. The average retail transaction price for new vehicles is trending toward $46,258, according to JD Power. For EVs, high costs are the biggest stumbling block for potential buyers, followed by insufficient charging infrastructure.
General Motors said it was able to boost sales without resorting to heavy discounts. The average price discount was 4.2%, down almost a point from the first quarter. GM said its average transaction price was over $51,000, which was $1,000 more than it was in the first quarter.