Most automakers, except Tesla, reported modest sales growth Tuesday in the three months from April to June, as high interest rates, still-high vehicle prices and uncertainty about the economy and the upcoming presidential election weighed on consumers.
Late-June sales were also slowed by disruptions at auto dealerships resulting from a cyberattack on a company that provides software and data services to dealers.
Cox Automotive, a market research firm, estimated that 4.1 million new cars and trucks were sold in the second quarter, a slight increase from the same period in 2023. In the first six months of 2024, 7.9 million new vehicles were sold, a 3% increase from the first half of last year, Cox said.
Growth is expected to continue to slow through the end of the year as consumers postpone major purchases until after the election, said Jonathan Smoke, Cox’s chief economist. “The market is unsettled by uncertainty,” he said. “We probably won’t be able to maintain the sales pace of the first half, but we don’t expect a sales collapse either.”
Cox forecast that 15.9 million new cars and trucks will be sold this year. That would be up from 15.5 million sold last year but still well below the 17 million vehicles sold annually before the pandemic.
General Motors said Tuesday it sold nearly 700,000 cars and trucks in the U.S. in the second quarter, an increase of less than 1% from the same period last year. The company said that was its highest quarterly total since the fourth quarter of 2020.
The quarterly total includes sales of nearly 22,000 electric vehicles, up 40% from a year earlier. Nearly all were models using GM’s more advanced Ultium battery technology. Its top-selling electric models were the Cadillac Lyric, a luxury sport utility vehicle, and the Chevrolet Blazer, also an SUV.
GM said its sales in the first six months of 2024 totaled 1.3 million vehicles, down slightly from the same period in 2023.
Tesla said Tuesday that its global sales fell 4.8% in the second quarter, to about 444,000 units, compared with the same period a year earlier. The company’s sales have now fallen for the second straight quarter; they were down 8.5% in the first three months of the year compared with a year earlier.
Tesla’s second-quarter sales beat analysts’ expectations, and were helped by price cuts in some markets and the offering of loans with interest rates as low as 1% on the Model Y sport utility vehicle. Tesla likely sacrificed profits to support sales, analysts said.
Tesla was once the only automaker with a monopoly on electric cars, but it has recently faced fierce competition from Chinese automakers like BYD, Nio and SAIC, which sells cars in Europe under the British MG brand. The Chinese brands undercut Tesla in their home markets while offering features like dashboard screens that can be rotated by voice command.
In Europe, Tesla ranked fifth in electric car sales in April, according to Schmidt Automotive Research. Tesla ranked behind Volkswagen, Geely Auto, which owns Volvo and Polestar, Stellantis, which owns Peugeot and Fiat, and BMW.
Tesla’s U.S. market share is expected to fall below 50% this year as GM, Honda and other established automakers offer newer models than the Tesla Model Y and Model 3, which account for 95% of Tesla sales.
Official industry sales totals will not be available until Wednesday, when Ford Motor is expected to release its final sales figures.
The auto industry is still trying to regain a sense of normalcy after the pandemic disrupted car production and left manufacturers struggling with shortages of critical parts for most of the past three years.
Dealers now have a large inventory of new vehicles, about 2.8 million, Cox said. But rising new-vehicle prices have made it harder for many consumers to afford them. Cox said the average price of new vehicles sold in May was $48,389, close to the record high of about $50,000 set in late 2022.
High interest rates have also dampened demand for new vehicles. The average interest rate paid on new-vehicle loans in June was 10%, the highest level in 24 years, Cox said.
For a while, electric vehicles have been a growth area for automakers, but sales of those models have slowed sharply over the past 12 months. Cox said just under 300,000 battery-powered cars and trucks were sold in the second quarter, about the same number as the same period a year earlier.
Consumer interest in these cars has cooled because they tend to sell for higher prices than gasoline-powered models, and because many potential buyers worry about how far they can go on a fully charged battery and the difficulty of refueling them.
At the same time, interest in hybrid vehicles, which feature a combustion engine, batteries and electric motors, has grown, helping automakers such as Toyota, Honda, Hyundai-Kia and Ford offer hybrid models.
