US new car sales hit five-year high in 2024

US new car sales in 2024 continued to rise from their pandemic lows, bolstered by replenished inventories, higher incentives and surging demand for hybrid vehicles, carmakers reported on Friday.

Sales of new vehicles finished at 15.9-million last year, according to Wards Intelligence, up 2.2% from the year before and the highest since 2019. Carmakers are projecting strong sales will continue into 2025, though president-elect Donald Trump’s proposed automotive policies, such as removing tax credits for EVs, present a wild card.

“We’re carrying significant momentum into 2025,” said Rory Harvey, GM head of global markets.

The Detroit carmaker defended its 2023 crown as the biggest US carmaker by sales, selling 2.7-million vehicles last year, the company said on Friday, up 4.3% from 2023.

Most carmakers recorded solid sales results last year as they adjusted to slowing demand for EVs and relied on their core business of petrol-powered trucks and SUVs, while some capitalised on soaring consumer interest in hybrid vehicles.

Sales of traditional hybrids increased 36.7% in 2024 compared with the year before, Wards reported.

‘Hybrids, we’re sold out’

Toyota notched a 3.7% sales gain year-over-year in the US, boosted by steady increases of reliable smaller vehicles such as the Camry and Rav4 SUV, as well as significant gains for hybrid vehicles. Reuters reported last year that the carmaker was potentially converting its whole line-up into hybrid-only models.

“For hybrids, we’re sold out. Customers want them, we can’t get enough of them,” said David Christ, head of sales and marketing for Toyota in North America.

“Battery electric vehicles, even with the huge incentives we’re spending on and the federal government’s incentives, are not as in demand.”

Ford Motor also benefited from an increase in hybrid sales, which helped the carmaker’s total vehicle sales rise 4.2% in 2024. The Dearborn, Michigan, company sold roughly double the number of hybrids compared with its electric vehicles (EVs), with 187,426 hybrids sold and 97,865 EVs.

Carmakers have axed or changed lofty EV plans laid out when demand seemed much stronger than it turned out to be, but are aiming to attract new EV buyers.

Ford said on Friday that in an effort to support EV sales, which were up 34.8% for the carmaker in 2024, it would extend a programme where EV buyers received free chargers and installation at home through until the end of March.

US sales of EVs were expected to approach 1.3-million, or about 8% of all new vehicles purchased, Cox Automotive said. Buyers’ willingness to go electric crept up slightly from 2023, when US drivers bought 1.2-million EVs, comprising 7.6% of all sales, Cox said.

The Trump administration’s plans is likely to affect car sales in 2025 and beyond if the incoming president makes good on plans to roll back President Joe Biden’s EV policies, including a $7,500 consumer tax credit on some EVs, as well as increase tariffs on imports from Mexico and Canada.

“If you take true demand for the car and you eliminate the $7,500 benefit, it’s going to change who wants them and how they buy them. We’re preparing for that,” Toyota’s Christ said.

Stellantis and Tesla lag

Jeep maker Stellantis and EV giant Tesla were the outliers last year, recording slipping sales compared with 2023.

Stellantis had a particularly rocky 2024, selling 15% fewer vehicles in the US compared with 2023, and recording decreases across its popular Ram, Jeep and Dodge brands, the company reported on Friday. The French-Italian carmaker grappled with fallout from an aggressive pricing strategy that ultimately led to the abrupt departure of former CEO Carlos Tavares.

Tesla has faced slowing sales as its line-up grows stale and competition in China intensifies, eating into an important market for the company run by Elon Musk. The EV giant reported a rare decrease in yearly deliveries last Thursday.

Reuters