J.D. Power-GlobalData Forecast December 2025

New-Vehicle Retail Sales Up 4.0% for Full Year 2025

December Retail Sales Still feeling Impacts of Tariff and EV Pull Ahead

TROY, Mich.–(BUSINESS WIRE)–J.D. Power:

The Total Sales Forecast

Total new-vehicle sales for December 2025, including retail and non-retail transactions, are projected to reach 1,454,000, a 7.5% decrease year over year, according to a joint forecast from J.D. Power and GlobalData. December 2025 has 26 selling days, one more than December 2024. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 3.8% from 2024.

The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.9 million units, down 1.1 million units from December 2024.

New-vehicle total sales for Q4 2025 sales are projected to reach 4,019,200 units, a 5.0% decrease from Q4 2024 when adjusting for the number of selling days.

New-vehicle total sales for the second half of 2025 are projected to reach 8,061,500 units, a decrease of 1.3% from a year ago when adjusting for the number of selling days.

New-vehicle total sales for full-year 2025 are projected to reach 16,275,300, an increase of 2.3% when adjusting for the number of selling days.

The Retail Sales Forecast

New-vehicle retail sales for December 2025 are projected to reach 1,222,800, a 7.4% decrease from December 2024. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 3.7% from 2024.

New-vehicle retail sales for Q4 2025 sales are projected to reach 3,374,300 units, a 4.8% decrease from Q4 2024 when adjusting for the number of selling days.

New-vehicle retail sales for the second half of 2025 are projected to reach 6,905,900 units, an increase of 0.4% from a year ago when adjusting for the number of selling days.

New-vehicle retail sales for full-year 2025 are projected to reach 13,599,300, an increase of 4.0% when adjusting for the number of selling days.

The Takeaways

Thomas King, president of OEM solutions at J.D. Power:

“December caps a year marked by volatility, as the industry continues to deal with the consequences of import tariffs and changes to electric vehicle legislation. To say it’s been a sales roller coaster of a year would be an understatement.

“Fears of future tariff-related price hikes caused sales to jump by 173,000 vehicles between March and April, followed by a sales slowdown in subsequent months. Another sales jump occurred between August and September as 304,200 electric vehicle shoppers made purchases before the September 30^th expiration of federal EV tax credits, followed by another sales slowdown whose effects are still being felt in December.

“All this volatility means that simple year-over-year comparisons of the health of new vehicle sales are inherently noisy. However, there is no escaping the fact that demand for new vehicles remains robust.

“Retail sales in December will be down 7.4% (selling day adjusted) and Q4 sales will be down nearly 5% while full-year sales will be up 4%. Much of the decline in December is attributable to slower sales of EV’s, which are on track to account for just 6.6% of retail sales in December, down from 11.2% a year ago.

“Despite much speculation regarding major increases in new vehicle prices due to tariffs, the actual increases, as correctly predicted by J.D. Power, have been muted. The average new-vehicle retail transaction price in December for all vehicles is expected to reach $47,104, up $715 or 1.5 percent from December 2024. Separating out electric vehicles, the average price on non-EV’s has powered vehicles rose 1.4% to $46,807.

“In total, retail consumers will have spent $620.0 billion dollars on new vehicles in 2025, up 5.8% from last year. Total aggregate retailer profit from selling new vehicles is expected to be $29.9 billion, down $0.4 billion from last year. Lower EV sales are providing a boost to manufacturer and retailer profitability as the steep discounts once required to drive high EV volumes begin to unwind. This shift marks an important turning point for the industry, though the full impact will be realized in 2026, the first year where these dynamics play out across all twelve months.

“The industry is not without its challenges, however. Affordability pressures remain significant, with monthly finance payments reaching a new record for the month of December at $776. In response, more consumers are turning to extended 84-month loan terms, which are expected to account for 10.1% of financed sales this month — the second highest level on record for the month of December behind 2021.”

The average manufacturer’s incentive spend per vehicle is on track to reach $3,433, which is $140 higher than November and $77 higher than a year ago. Expressed as a percentage of MSRP, incentive spending is currently at 6.5%, up 0.1 percentage points from last year. Discounts on EVs are expected to average $11,414 in December, down $57 compared with December 2024, and down $472 from November 2025. Discounts on non-EVs are projected at $3,219, an increase of $425 from last year.

Easing interest rates and strong used-vehicle values—reflected in higher trade-in equity—are providing some relief to buyers facing elevated monthly payments.

The average interest rate for new-vehicle loans in December is 5.84%, a decrease of 32 basis points from a year ago.

“The average used-vehicle price is trending toward $29,571, up a modest $8 from a year ago. This reflects the continued low supply of recent model-year used vehicles due to lower new-vehicle production during the pandemic, fewer lease maturities, and manufacturers moderating discounts. A rise in used-vehicle prices is good news for new-vehicle buyers with a trade-in, although average trade-in equity in December is down a modest $327 year over year to $7,903. The number of new-vehicle buyers with negative equity on their trade-in is expected to reach 26.9%—an increase of 4.0 percentage points from December 2024.

“Elevated transaction prices in December are not enough to offset the lower sales pace, with consumers on track to spend nearly $56.6 billion on new vehicles this month—1.5 percent lower than a year ago. Total retailer profit per unit, which includes vehicle gross plus finance and insurance income, is expected to be $1,974, down $112 from December 2024 and down $73 from November 2025. Total aggregate retailer profit from new-vehicle sales for this month is projected to be $2.3 billion, down 7.4 percent from last year.

“Looking ahead, the industry will face a mix of head and tailwinds in 2026. Among the positives, anticipation of lower interest rates, an increase in the number of leases maturing, and the recalibration of OEM production schedules to accommodate new tariff realities and EV requirements will help boost demand and reduce pressure on OEM and retailer profit margins. Conversely, new vehicle affordability remains at an all-time low and used vehicle values will be under pressure throughout 2026. In sum, these dynamics set the stage for a more balanced and potentially stronger performance as 2026 progresses.”

The Details

• Fleet sales are expected to total 231,247 units in December, down 7.6% from December 2024. Fleet volume is expected to account for 15.9% of total light-vehicle sales, flat from a year ago.
• Internal combustion engine (ICE) vehicles are projected to account for 78.1% of new-vehicle retail sales, an increase of 4.6 percentage points from a year ago. Plug-in hybrid vehicles (PHEV) are on pace to make up 1.1% of sales, down 1.5 percentage points from December 2024, while electric vehicles (EV) are expected to account for 6.6% of sales, down 4.6 percentage points, and hybrid electric vehicles (HEV) are expected to account for 13.7% of new-vehicle retail sales, up 1.0 percentage points.
• U.S. final assembly vehicles are expected to make up 56.2% of sales in December, up 3.2 percentage points from a year ago.
• Trucks/SUVs are on pace to account for 83.1% of new-vehicle retail sales, up 0.6 percentage point from December 2024.
• Retail inventory levels are currently at 2.39 million units, an 11.7% increase from December 2024.
• The industry’s inventory days of supply is 70 days in December, up from 8 days from a year ago.
• The average new-vehicle retail transaction price in December is expected to reach $47,104, up $715 from December 2024. Transaction price as a percentage of MSRP was flat from a year ago at 89.0%.
• Retail buyers are on pace to spend $56.6 billion on new vehicles, down $0.3 billion from December 2024.
• Average incentive spending per unit in December is expected to reach $3,433, up $77 from December 2024. Incentive spending as a percentage of the average MSRP is expected to increase to 6.5%, up 0.1 percentage points from December 2024.
• Average incentive spending per unit on trucks/SUVs in December is expected to be $3,584, up $136 from a year ago, while the average spending on cars is expected to be $2,670, down $226 from a year ago.
• Leasing is expected to account for 21.3% of sales this month, down 2.0 percentage points from a year ago.
• The average time a new vehicle remains in the dealer’s possession before sale is expected to be 56 days in December, which is flat from a year ago.
• 25.8% of vehicles sold in less than 10 days in December, down 2.5 percentage points from a year ago.
• Average monthly finance payments are on pace to be $776, up $21 from December 2024. The average interest rate for new-vehicle loans is expected to be 5.84%, down 0.32 percentage points from a year ago.
• So far in December, average used-vehicle retail prices are $29,571, up $8 from a year ago. Trade-in equity is trending towards $7,903, which is down $327 from a year ago.
• 26.9% of trade-ins are expected to carry negative equity this month—an increase of 4.0 percentage points from December 2024.
• Finance loans with terms greater than or equal to 84 months are expected to reach 10.1% of finance sales this month, up 1.4 percentage points from December 2024.

Electrification Outlook

Tyson Jominy, senior vice president of OEM customer success at J.D. Power:

“One quarter removed from the expiration of federal tax credits, the automotive industry is exiting 2025 with stabilization in its electrification journey. Electrified vehicles, including battery electric (EVs), hybrids, plug-in hybrid (PHEVs), and extended range EVs (EREVs), accounted for 22.6% of sales in Q4, compared with 24.9% in the same quarter last year. While overall share declined by 2.3 percentage points, the market is finding its footing as consumer demand adjusts to the new incentive landscape.

“EV retail share in the quarter fell to 6.2%, down 3.6 percentage points from the same period last year. EV transaction prices rose to $53,300, an increase of nearly $6,000 year-over-year, and approximately $5,000 above the ICE average. Tesla has reasserted its EV leadership position, capturing roughly 60% of all EV sales, up 15 points from last year. More than 30 other brands in the industry divided the remaining market, with none exceeding 6% individually. Plug-in hybrids (PHEVs) ended Q4 at just under 1% share, with transaction prices averaging $66,100. Toyota and BMW emerged as the PHEV leaders, representing opposite ends of the pricing spectrum, while 20 additional brands split the balance.

“Hybrids continued to be the growth engine of electrification, rising to 15% share, a gain of 2.5 percentage points year over year. Transaction prices averaged $43,000, up $1,660. Toyota and Lexus together accounted for more than half of hybrid sales, and when combined with Honda, the three brands represented nearly 70% of the segment. The remaining 30% was divided among eight other manufacturers, underscoring the concentrated leadership in this technology.

“Toyota’s dominance across powertrain types is particularly noteworthy. In addition to leading in internal combustion engine vehicles, Toyota holds commanding share positions in hybrids and plug-in hybrids, reinforcing its role as a multi-powertrain leader. Tesla remains the clear frontrunner in EVs, while the broader market remains fragmented. Together, these dynamics highlight both the resilience and the evolving competitive landscape of electrification in the post-tax credit era.”

Global Sales Outlook

David Oakley, manager, Americas vehicle sales forecasts at GlobalData:

“November global light-vehicle sales are estimated to have decreased 2.2% year over year to 8.1 million units, with most regions other than Europe seeing declines. The selling rate for November was estimated at 94.8 million units, down from 95.7 million units in October.

“With China and the U.S. being the largest markets worldwide, moderate year over year declines in these countries contributed the most to the global fall in sales. In China, the year over year decrease was linked to extremely strong volumes in November 2024, as consumers rushed to take advantage of a government trade-in scheme, which was eventually extended anyway. On a more positive note, sales in India increased in November, thanks to reductions in the General Sales Tax, as well as heightened demand during India’s festival season.

“December sales are expected to decrease 1.1% from December 2024. The U.S. and Canada are expected to be unable to match strong year-ago demand, while Europe is forecast to see a modest year-over-year decline, especially in France, where political instability appears to be impacting consumer confidence. The global selling rate is expected to reach 93.3 million units in December, down from a rate of 96.4 million units in December 2024.

“Should the December forecast be borne out, it would result in total 2025 global sales of 92.1 million units (+3.7% year over year), up by around 700k units from our forecast a month ago. The outlook for India has been upgraded, with that market carrying strong momentum, while tariffs and trade tensions appear to be having a less significant impact on sales than was once feared.”

About J.D. Power

J.D. Power is a global leader in automotive data and analytics, and provides industry intelligence, consumer insights and advisory solutions to the automotive industry and selected non-automotive industries. J.D. Power leverages its extensive proprietary datasets and software capabilities combined with advanced analytics and artificial intelligence tools to help its clients optimize business performance.

J.D. Power was founded in 1968 and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit jdpower.com/business. The J.D. Power auto-shopping tool can be found at jdpower.com.

About GlobalData https://www.globaldata.com/

Contacts

Media Relations Contacts
Joe LaMuraglia, J.D. Power; East Coast; 714-621-6224; [email protected]