U.S. October Auto Sales - Lower as EV credits expire
US auto sales have shown a significant slowing in October, to a 15.3m pace from 16.4m in September. The slowing is seen largely due to the expiry of federal credits for electric vehicle purchases on September 30.
Q3 GDP, supported by consumer spending, looks set to show a healthy rise, but Q4 is likely to be weaker as auto sales lose momentum and the government shutdown provides additional weight. However the October decline takes the auto sales pace to the low end of the recent range but not below.
The auto sales pace was very stable around 15.5m until it picked up in late 2024 and early 2025 in part because consumers feared higher prices due to tariffs. That sales can be pushed above trend by temporary factors but have not, at least so far, fallen below trend as these temporary factors fade suggests some underlying health in the market.