Ford, General Motors get disturbing news on car sales

F -1.52% GM +0.97%

Automakers rode concerns about the threat of tariffs to a record-setting pace in the first three quarters of the year.

Thanks to pressure from the White House, automakers tried their best to keep prices down, despite losing billions of dollars to taxes on imported cars and car parts.

General Motors Q3 facts at a glance:

• U.S. market share: 17%

• Electric vehicles sold: 67,000

• EV market share: 16.5%

• Dealer inventory: Down 16% year over year

• EV inventory: Down 30% since June Source: General Motors

Ford used incentives and the fear of tariffs to become the top-selling brand in the U.S. during the year’s first half. Ford said total sales in the second quarter rose at a rate seven times that of the overall auto industry.

It sold 1.1 million units in the first six months, a 6.6% year-over-year increase.

In the third quarter, GM reported a 17% market share, its most substantial presence in the U.S. since 2017.

But the latest new-car sales data from Cox Automotive suggest that the good times have come to an end for the time being, as consumers react to rising prices.

U.S. new car sales expected to drop in November

Analysts have been expecting new car sales to slow down in the fourth quarter, and so far, their forecasts have been correct.

November new-vehicle sales are forecasted to fall 7.8% year over year when the official numbers are announced next week, according to Cox Automotive.

Related: Another European car company gets knocked out by tariffs

Sales volume is expected to decline 1% month over month to 1.27 million. The seasonally adjusted annual rate is expected to reach 15.7 million in November, a slight increase from October's 15.3 million vehicle pace, but down from last year's 16.5 million level.

"The headwinds from higher prices and fewer government subsidies for electric vehicles are finally slowing the market after a surprisingly strong previous six months," said Cox Automotive Senior Economist Charlie Chesbrough.

Electric vehicles are expected to take a big hit, thanks to the expiration of the $7,500 EV tax credit on September 31. Consumers rushed to dealerships to take advantage of the benefit before it expired, resulting in a sharp increase in sales.

But tariffs also played a massive role in the early-year surge.

"Sales began surging in the spring as buyers rushed to market to beat expected higher prices in the wake of announced tariffs. Now, with more tariffed products replacing existing non-tariffed inventory, prices are drifting higher, leading to slower sales which may last through the remainder of the year and into next year," Chesbrough said.

Tariffs and tax incentives are driving the U.S. demand

A February consumer poll from CivicScience revealed that six in 10 Americans would find an alternative brand or stop purchasing an impacted product if their favorite brand were impacted by tariffs.

“Automakers are providing healthy incentives to keep sales flowing. Prices are trending higher, but just as we are seeing in the broader retail markets, there’s sufficient demand and generous incentives out there, and that’s driving the market,” said Cox Automotive Executive Analyst Erin Keating.

Related: Carvana CEO shares blunt truth about EVs

But U.S. EV sales dropped sharply in October, the first month without the tax incentive.

Dealers sold 74,835 electric vehicles in the U.S. in October, according to Cox Automotive data, representing a 48.9% year-over-year decrease.

While a nearly 50% decline sounds troublesome, remember that buying activity was exceptionally robust in September due to the expiration of the tax credit.

However, the 30% year-over-year decline is nearly as worrisome.

"October marked a sharp reversal for the electric vehicle (EV) market as the expiration of the federal EV tax credit cooled demand after three months of accelerated sales," said Stephanie Valdez Streaty, director of industry insights for Cox Automotive.

"Buyers rushed to secure incentives before the deadline, but once it passed, momentum slowed. Inventories climbed quickly, and pricing shifted upward for both new and used EVs, reflecting a market in transition."

Related: Ford CEO Jim Farley shares 'shocking' lesson he learned from Tesla

This story was originally published by TheStreet on Dec 1, 2025, where it first appeared in the Automotive section. Add TheStreet as a Preferred Source by clicking here.