Stronger-Than-Expected Market Performance

In July 2025, the U.S. auto market delivered a better-than-expected performance:

Sales volume: 1.37 million units

SAAR (Seasonally Adjusted Annual Rate): 16.4 million units

+6.6% YoY

+7.1% MoM

Despite challenges such as high interest rates, rising prices, and tariff uncertainties, the recovery stood out as remarkable.

Key Drivers of Growth

Light-duty trucks remained the main driver, accounting for 84% of total sales.

Consumers prioritized space, functionality, and diverse energy options.

Sales growth was partly influenced by:

Advance purchases triggered by tariff policy uncertainties

Low comparison base caused by last year’s system failures

This rebound was more of a correction after fluctuations than a fundamental trend change.

Overall Market Recovery in the U.S.

July SAAR: 16.4M units, higher than June and the 15.8M units in July 2024.

Segment trends:

Light-duty trucks (pickups & SUVs) led growth

Sedans continued to decline and lose market share

Notably:

Growth was not purely demand-driven.

Advance release (March–April tariff fears) distorted timing of purchases.

2024 system failure amplified this year’s YoY growth.

Macroeconomic Factors Remain Complex

High interest rates: raised auto loan costs, suppressing demand

Tariffs: pushed up vehicle and parts prices, reducing affordability

Incentives: remained below historical levels, reflecting manufacturers’ own cost pressures

Overall, July’s rebound was the result of resilient demand + policy expectations + cyclical corrections, but sustainability remains uncertain.

EV Segment: Divergence Within Electrification

Hybrid Vehicles Shine Brightest

HEV sales: 160,000 units (+20% YoY)

Toyota: 40%+ market share

Affordable prices

Mature technology

No charging infrastructure required

👉 Hybrids represent incremental adoption—a pragmatic bridge in the U.S. electrification journey.

Plug-In Electric Vehicles (PEVs) Underperform

Total PEV sales: ~135,000 units (–1.1% YoY)

BEVs: ~113,000 units (9.9% market share)

PHEVs: ~21,000 units

BEV penetration stalled near 10%, restrained by:

High prices

Uneven charging infrastructure

Policy uncertainty

Fuel Cell Vehicles (FCVs): negligible, only 37 units sold.

Policy-Driven Surge

IRA tax credits approaching expiration created a “rush to purchase”.

Both new and used EV sales surged, pushing the EV market to a short-term peak.

Sales by Brand

New EV Market

Tesla: 53,816 units (dominant leader)

Chevrolet, Hyundai, Ford, Honda: strong performance

Volkswagen: +454% YoY, ranked 6th

Luxury brands: Audi (+150.2%), Cadillac (+14.5%), Mercedes (+6.4%)

Used EV Market

Sales: 36,670 units

+23.2% MoM

+40.0% YoY

Market share: 2.2% of total used market

Tesla: still leading, but share dropped (45.2% → 43.4%)

Strong growers: Honda (+103%), Hyundai (+61.3%), Rivian (+60.5%)

Supply-Side Dynamics

New EV Inventory

Days’ supply: 87 days

–32.3% MoM

–49.0% YoY

Gap with ICE narrowed to just 11.6 days

Brand contrasts:

Audi: 168 days (highest, but improving)

Toyota: 42 days (tightest balance)

Used EV Inventory

Days’ supply: 40 days (record low)

For 5 straight months, below ICE vehicles

Tesla, Chevrolet, Nissan: fastest turnover → “supply-constrained frenzy”

Price & Incentive Trends

New EVs

Average Transaction Price (ATP): $55,689

–2.2% MoM

–4.2% YoY

Price gap vs. ICE narrowed to $7,611 (smallest in nearly a year)

Incentives:

Reached 17.5% of sale price ($9,768) → historic high

Brand examples:

Volvo –17.1%

Volkswagen –12.2%

Tesla: targeted rebates on Model Y/3

Used EVs

Average listing price: $35,263

–1.9% MoM

+1.6% YoY

Price gap vs. ICE narrowed to $1,266 (historic low)

Tesla models continued to retain strong residual value

Tesla Maintains Leadership

Model Y + Model 3: >60% of total EV sales

Advantages:

Balanced pricing ($40K–55K)

Expanded Supercharger network

High residual value

Used market:

Tesla Model Y = 43.4% share

Hyundai IONIQ 5 rapidly gaining traction (+61.3% YoY)

Outlook: Short-Term Boom, Long-Term Questions

Q3 momentum likely remains strong due to IRA “pre-expiration rush”

Post-subsidy, sustainability depends on:

1. Automakers’ ability to balance price vs. value
2. Continued improvement in supply-demand alignment

Conclusion: A Numbers-Driven July Boom

Resilient but unsustainable rebound amid:

High interest rates

Tariff-driven price pressures

Cost constraints

NEV signals:

Hybrids → strong growth, cost-effective adoption

BEVs → stalled, infrastructure & price bottlenecks

PHEVs → lackluster

Future:

Likely final sales sprint in late 2025 (IRA effect)

Followed by market rebalancing to align with fundamentals