EVs close out 2024 with a bang, used car market finally stabilizes, auto financing reaches new highs

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25% of all new vehicles sold in 2025 will be electrified:

Pure electric vehicles (EVs) are forecasted to reach 10% market share this year — while hybrids and plug-in hybrids (PHEVs) will make up the remaining 15%.

And gas powered engines?

They’ll tumble to 75% — the lowest level on record.

At the end of the day — even if federal EV tax credits are rolled back…

Analysts still expect new EV products combined with sales support and state tax credits will buoy the market.

(Data source: Cox Automotive)

1. Monthly new car payments hit new peak in Q4, lower interest rates offer some relief

Affordability challenges in the auto market hit new extremes in Q4, with 18.9% of new car buyers committing to $1,000+ monthly payments — the highest share on record.

While this raises concerns, the majority of new car buyers are prime borrowers, making widespread delinquencies less likely compared to the subprime-heavy used market.

In fact, there’s some good news for shoppers feeling the squeeze: average APRs for used vehicles are falling faster than for new cars, and more affordable EV lease deals are hitting the market.

These shifts could provide much-needed relief for consumers exploring options beyond new cars … (Go deeper: 2 min. read)

2. Tight supply locks in elevated prices for used cars

The used car market is turning a corner, with retail sales set to rebound to 20.1 million in 2025 — the highest since 2021.

Prices have leveled off, but affordability is another story — ~$30,000 is now the going rate for many late-model used cars, leaving some buyers searching for older options.

Meanwhile, tight inventory, fueled by fewer lease returns, is keeping prices from dropping further.

While supply challenges aren’t going away, more predictable pricing could help both buyers and dealers find their footing … (Go deeper: 2 min. read)

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3. Electric vehicle vehicle demand surges in Q4

EV sales ended 2024 on a high note, with several automakers posting record numbers and strong growth.

• GM’s EV sales jumped 50% in Q4, while Ford, Toyota, and Hyundai all saw impressive gains across their electric and hybrid lineups.

• Even with Tesla’s slight decline in annual sales, the company still holds over 50% of the U.S. EV market.

But the momentum heading into 2025 comes with challenges like the potential end of federal EV tax credits.

Bottom line? Although the pace of EV sales growth underwhelmed the industry last year, it’s unlikely even federal policy changes will stop the momentum now … (Go deeper: 3 min. read)

• Survey: Chrysler-Dodge-Jeep-Ram unseats Ford as least-trusted brand among dealers.

• 2025 Detroit Auto Show ready to deliver: Highlights, surprises coming to revamped event.

• VW ID.4 now costs less than $200/month to lease.

• The Ford Mustang Mach-E handily outsold the gas Mustang In 2024.

• Xpeng, Volkswagen to build ultra-fast EV charging network in China.

Thanks for reading everyone.

— CDG