U.S. Vehicle Sales Drop as EV Subsidies Expire

U.S. light vehicle sales fell sharply in October following the expiration of federal tax credits for electric vehicles (EVs), according to data from Omdia. Sales dropped 6.5% to a seasonally adjusted annual rate of 15.3 million units. EV sales plunged to 74,897 units from 98,289 in September after President Donald Trump’s “One Big Beautiful Bill” ended the $7,500 new-EV and $4,000 used-EV subsidies on October 1.

Economists say the loss of incentives, combined with labor market weakness and rising tariff pressures, is dampening consumer demand. “With concerns about the labor market building, the near-term outlook for auto sales could be soft,” said Ben Ayers of Nationwide Financial.

Overall, unadjusted light vehicle sales fell 4.5% from a year earlier, signaling moderate retail activity. Ongoing economic uncertainty, artificial intelligence adoption, and immigration-related labor shortages have slowed hiring, with unemployment near a four-year high at 4.3%. Grace Zwemmer of Oxford Economics warned that tariffs will continue to pressure automakers: “They can’t absorb the costs through profit margins forever.” Sales of all-electric vehicles collapsed in October. Ford, Kia, Hyundai, and Toyota saw steep drops as buyers rushed to purchase before the credits expired. Ford’s all-electric sales fell 25% year over year, including a 17% drop for its F-150 Lightning. Hyundai’s Ioniq 5 and Ioniq 9 sales plunged 80% and 71% from September, while Toyota sold just 18 units of its BZ EV, down from 1,401 a year earlier.  Source: https://www.reuters.comhttps://www.cnbc.com