U.S. new-vehicle sales fell 3.6% year-over-year in September to an annualized rate of 16 million vehicles, while conventional hybrid sales surged 22.4% to capture 15.6% of the market. Battery electric vehicle sales declined 29.2% due to expiring federal tax credits and affordability pressures from rising interest rates and higher gas prices.
- U.S. sales pace: Down 3.6% year-over-year to 16 million annualized vehicles in September
- Hybrid surge: Conventional hybrid sales rose 22.4% with market share reaching 15.6%
- EV decline: Battery electric vehicle sales fell 29.2% to 6.2% market share
- Affordability crisis: Average monthly car payment reached $821, up 3.2%, with 29.4% of trade-ins carrying negative equity
- Market headwinds: Rising interest rates, higher gas prices, and slowing wage growth pressuring buyer demand
The U.S. new-vehicle sales pace has fallen 3.6% year over year to an annualized rate of 16 million vehicles in September.
Patrick Manzi, chief economist at the National Automobile Dealers Association, outlined the figures in September Market Beat, published Oct. 5. NADA represents franchised new-car and truck dealers and is based in Tysons, Va.
The seasonally adjusted annual sales rate through September was 16.1 million vehicles, down 1.9%. An annualized rate adjusts for seasonal and calendar effects to express the sales pace over a full year.
Conventional hybrid sales rose 22.4% through September. Their share of new-vehicle sales reached 15.6%, up 3.1 percentage points. Battery electric vehicle sales fell 29.2%, with market share dropping 2.3 percentage points to 6.2%.
Manzi noted that purchases ahead of the September 2025 expiry of federal EV tax credits had inflated last year’s sales. Labour Day sales also fell into different reporting months, boosting September’s figures this year.
There are “headwinds from rising interest rates, higher gas prices and slowing real wage growth,” Manzi wrote. He maintained a full-year forecast of 16 million vehicles.
Affordability remained a pressure for U.S. buyers. Thomas King, president of OEM solutions at J.D. Power, projected an average September monthly finance payment of US$821, up 3.2%.
J.D. Power, a vehicle data and consumer analytics business based in Troy, Mich., also projected that 13.9% of new-vehicle loans would run for 84 months or longer. Some 29.4% of trade-ins were expected to carry negative equity, meaning the outstanding loan exceeded the vehicle’s value.
Canadian sales provided a different September result. As previously reported, estimates compiled by Toronto-based automotive consulting business DesRosiers Automotive Consultants put sales at 168,000 vehicles, up 3.4%. Sales through September remained 0.7% below 2025 levels.
Canada’s September annualized sales rate was 1.91 million vehicles. The month had one more selling day than September 2025. The Canadian monthly sales increase and the decline in the U.S. annualized rate measure different things.
Canadian manufacturer results also showed growth in electrified vehicles. Toronto-based Toyota Canada, the Canadian distributor of Toyota and Lexus vehicles, recorded 22,477 September sales, up 13.6%. Electrified vehicles accounted for 15,077 sales, up 49.8%.
Through September, Toyota Canada sold 130,369 electrified vehicles, exceeding its previous full-year record of 123,879 in 2025. These figures cover one distributor and include conventional hybrids, plug-in hybrids and battery electric vehicles. They are broader than NADA’s conventional-hybrid category.
