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Investing.com -- New vehicle sales in October are forecast to slow from the strong pace seen in the third quarter, with electric vehicle (EV) and plug-in hybrid vehicle (PHEV) sales expected to drop significantly following the expiration of tax credits.
According to Cox Automotive, the seasonally adjusted annual rate (SAAR) for October is projected to reach 15.7 million vehicles, down from 16.1 million last year and 16.4 million in September. Sales volume is expected to hit 1.30 million units, representing a decrease of more than 3% compared to October 2024, though this marks a 2.7% increase from September.
"The new-vehicle sales pace was surprisingly strong this summer despite ongoing tariff uncertainty," said Charlie Chesbrough, senior economist at Cox Automotive. "However, as more tariffed products replace non-tariffed inventory, prices are tracking higher, which should lead to slower sales through the remainder of the year."
The decline in October sales is largely attributed to the end of the $7,500 EV tax credits that expired at the end of September. These incentives had previously driven EV sales to record levels in the third quarter of 2025, when sales reached 438,487 units - a 40.7% increase from the previous quarter and 29.6% higher than the same period last year.
"The EV sales story will really change going forward from here," noted Chesbrough. "Sales of EVs and PHEVs are expected to collapse in October as tax credits expire. In addition, market conditions for other vehicles are expected to become more challenging in future months as prices increase."
Cox Automotive maintains its full-year sales forecast between 15.8 and 16.4 million vehicles, with 16.1 million as the baseline projection. The company has adjusted its forecast for both fleet and new retail sales higher following strong third-quarter performance, while lowering its lease penetration forecast from 25% to 24% due to the anticipated decline in EV leasing during the fourth quarter.
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