New vehicle sales in the U.S. are predicted to have faced challenges in the third quarter.

• According to Cox Automotive and Edmunds.com, sales are predicted to decline by approximately 2% in the third quarter of 2023 compared to the same period in 2022, resulting in about 3.9 million vehicles sold.
• The Federal Reserve's decision to cut rates may have a positive impact, but it does not assure a significant increase in sales for the remainder of the year.
• According to Cox, it is predicted that there will be an 8% increase in sales of EVs during the third quarter compared to the same quarter the previous year.

New vehicle sales in the U.S. are predicted to have decreased in the third quarter due to economic and political instability, high interest rates, and prices, according to industry experts.

Cox Automotive and Edmunds.com predict that sales will decrease by approximately 5% in the third quarter of 2023 compared to the second quarter of the same year, resulting in about 3.9 million vehicles sold.

The Federal Reserve's decision to cut rates was a positive step, but it does not guarantee a significant increase in auto sales for the remainder of the year.

"Charlie Chesbrough, Cox Automotive senior economist, stated that 2024 has been a volatile year for the new vehicle market, and more of the same is expected in Q4. He added that affordability remains the main obstacle to a stronger market, but it is improving, so they remain optimistic on the outlook for industry sales."

Both Cox and Edmunds predict that the number of light-duty U.S. vehicle sales in 2024 will be approximately 15.7 million. While Cox initially forecasted 16 million, they have since lowered their prediction. Edmunds, on the other hand, has kept their guidance consistent since the beginning of the year.

Edmunds' head of insights, Jessica Caldwell, stated that the current market is too expensive for many consumers, thereby limiting the number of Americans who can buy a new vehicle.

"The affordability of new cars appears to be a major concern. On average, individuals are financing $40,000 for a new car, which can be quite limiting for many buyers."

According to Cox, the average transaction price for a new vehicle is lower than the previous year but still higher than historical levels at $47,870.

According to forecasts, only a few major automakers, including and , are expected to experience growth during the third quarter compared to the previous year, while those with the biggest losses are predicted to be , and BMW.

Stellantis' sales are expected to decline by up to 21% in the third quarter compared to the previous year, and the company's CEO, Carlos Tavares, has prioritized profits and pricing over market share, particularly with the crucial Jeep and Ram brands.

Cox predicts that EV sales will increase by approximately 8% in the third quarter compared to the same period last year, despite initial expectations being higher.

Despite a forecasted decrease in sales of 2.4% during the quarter for U.S. EV leader Cox, the expected increase in EV sales comes from Tesla, which is expected to have its share drop below 50% for the second consecutive quarter, according to Cox.

Incentives for electric vehicles (EVs) are expected to increase, representing 13.3% of the average transaction price of the vehicles, which is the highest rate so far this year and more than 80% higher than incentives for traditional vehicles with internal combustion engines. Despite anticipations that average transaction prices for new EVs will remain flat year-over-year, incentives for the vehicles are expected to have a significant impact on sales.

The federal credit from the U.S. government for consumers to purchase or lease an electric vehicle is up to $7,500. However, not all new EVs qualify for the incentive unless they're leased.