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Following the expiration of electric vehicle (EV) incentives, the US new-car market is projected to decline in November. J.D. Power offers its latest market forecast.
Total new-vehicle sales in the US, including retail and non-retail transactions, is projected to reach 1,255,900 in November. This marks a 5.2% year-on-year decrease. The month has 25 selling days, one fewer than November 2024.
The seasonally-adjusted annualised rate (SAAR) for total new-vehicle sales is expected to be 15.4 million units. This is down 1.2 million units from November 2024.
Meanwhile, new-vehicle retail sales for November 2025 are projected to reach 1,058,500, a 4.8% decrease from November 2024.
‘November’s results reflect another notable, yet anticipated, decline in the new-vehicle sales pace, driven largely by the pull-ahead of electric vehicle purchases prior to the expiration of federal EV tax credits on 30 September,’ said Thomas King, president of the data and analytics division at J.D. Power.
That expiration proved a catalyst for many purchases, with a surge in transactions that temporarily inflated the overall industry sales pace. Now, around two months after the credit expired, the US continues to feel the impact of those accelerated purchases.
‘In November, EVs are expected to account for just 6% of new-vehicle retail sales, consistent with October but well below the 12.9% recorded in September,’ added King. ‘Carmakers are recalibrating pricing strategies following the expiration of EV tax credits, tariff dynamics and evolving fuel economy requirements, along with the transition to the new model year. These factors create some distortions in typical seasonal discount patterns.’
Discounts on EVs are expected to average $11,869 (€10,275) in November, up $260 from November 2024. However, this is down $928 from October 2025. Discounts on non-EVs are projected at $2,960, an increase of $161 from a year ago.
November’s average manufacturer incentive spend per vehicle is anticipated to reach $3,211. This is $375 higher than October and $125 lower than November 2024.
This year-on-year decline in incentive spend can be attributed to sales shifting away from heavily discounted EVs. This is moving towards non-EVs, with lower discounts. Additionally, the falling year-on-year percentage of leased vehicles is adding secondary pressure to lower incentive spending.
‘Leasing is expected to decline 2.7 percentage points (pp) from November 2024, reaching 20.5% of sales,’ stated King. ‘EV manufacturers have heavily relied on leasing to allow consumers to benefit from the EV tax credit, but EV leasing has declined 12 pp from November 2024, trending at 54%. A lower percentage of EV leases, combined with a lower percentage of EV sales, is driving incentive spending down from a year ago.’
King also highlighted that affordability pressures remain, with monthly finance payments reaching a record for November at $760. ‘In response, more consumers are turning to extended 84-month loan terms, which are expected to account for 11.1% of financed sales this month, nearing the highest level on record for the month of November set in 2022. The average new-vehicle retail transaction price in November is expected to reach $46,029, up $722 or 1.6% from November 2024,’ he confirmed.
‘The average used-vehicle price is trending toward $29,696, up $725 from a year ago,’ affirmed King. ‘This reflects the combination of reduced supply of recent model-year used vehicles due to lower new-vehicle production during the COVID-19 pandemic. There have also been fewer lease maturities and manufacturers moderating discounts.’
This trend continues to be good news for new-car buyers with a trade-in. However, average trade-in equity in November is down a modest $111 year over year to $7,822. The number of new-vehicle buyers with negative equity on their trade-in is expected to reach 26.9%. This marks an increase of 3.3pp from November 2024. Although negative equity is rising, it remains below the peak November level of 32.9% recorded in 2019.
Elevated transaction prices in November are not enough to offset the lower sales pace. Consumers are on track to spend nearly $46.8 billion on new vehicles this month, 6.4% lower than a year ago. Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is expected to be $2,161. This is up $6 from November 2024 and down $54 from October 2025.
‘The improvement in retailer profit per unit is primarily a function of lower EV sales, which typically generate lower retailer profits than non-EVs. Total aggregate retailer profit from new-vehicle sales for this month is projected to be $2.2 billion, down 7.7% from last year,’ Stated King
The industry enters the holiday sales season facing a mix of affordability challenges. These are coupled with evolving incentive strategies and lingering effects from the pull-ahead earlier this year.
Interest rates have eased, and used-vehicle values remain strong, providing some support for trade-in equity. Yet the number of leases set to expire in December is projected to be more than 15% lower than the same period a year ago. They are also expected to be 50% lower than in 2023, limiting the typical year-end boost.
‘Carmakers are expected to maintain disciplined pricing and restrained incentives,’ confirmed King, ‘particularly in non-EV segments, as they balance profitability with the need to stimulate demand. How aggressively manufacturers choose to adjust discounting and promotional activity during December will be critical in shaping the close of 2025.’
With the end of incentives, the US BEV market is now two months into a new phase. November data signals a shift in consumer behaviour and industry dynamics. BEV retail share has stabilised at 6%, flat from October, but notably lower than last year’s 9.6%.
PHEVs have seen an even steeper decline, dropping to 1.1% from 2.5% a year ago. This underscores the challenges facing electrified powertrains in a post-incentive environment.
‘Pricing trends further highlight the evolving landscape,’ highlighted Tyson Jominy, senior vice president of OEM customer success at J.D. Power. ‘EV transaction prices have surged by $6,500 year over year to $52,400. This makes them the second most expensive powertrain after PHEVs, which now averages $64,300, a jump of $8,400. In contrast, ICE vehicles average $46,000, while HEVs remain the most affordable option at $42,200.’
Despite these price increases, carmakers continue to rely heavily on incentives to drive BEV sales. With average support of $6,220 per vehicle, it remains highest among all powertrains.
‘Leasing remains a critical lever for EV adoption, with 54% of EV transactions occurring through leases, far outpacing ICE vehicles at 20% and hybrids at 15%,’ added Jominy. ‘While EV incentive spending has moderated compared to a year ago, the reliance on leasing and discounts underscores the challenges automakers face.
‘As the market adjusts to life without federal tax credits, manufacturers will need to rethink go-to-market strategies to balance affordability, profitability, and consumer demand in this new paradigm,’ he concluded.
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