EVs defy Q3 auto sales slump

Overall sales declined for most automakers during the third quarter, but a surge in electric vehicle demand offered some much-needed stability for the industry.

Driving the news: Q3 sales were projected to decline on weaker demand and a mix of unique challenges, including fallout from the CDK Global cyberattack and dealership shutdowns due to Hurricane Helene.

• Toyota reported quarterly sales of 542,872 vehicles, down 8% year-over-year. Stop-sales and recalls of high-profile models issued during the quarter impacted the company’s ability to meet demand. However, sales remain higher on a year-to-date basis by 6.2%.

• General Motors delivered 659,601 vehicles during Q3, a decline of 2%. However, its retail sales improved by 3% and the brand remains the biggest seller of vehicles in the U.S.

• Honda is one of the few brands to emerge with a quarterly win, boosting sales by 8% with 366,214 units. While Acura sales declined by 10.3%, a massive jump in truck demand gave Honda an edge during the quarter.

Zooming in: While overall sales declined across the industry, most brands saw a noteworthy uptick in electric vehicle demand (including both hybrid and fully-electric models).

• Nearly half (48%) of vehicles sold by Toyota in September were fully electric, hybrid or hydrogen-powered. On a quarterly basis, Toyota EVs are up 38.6% year-over-year.

• General Motors saw a massive spike in EV demand compared to the previous quarter, with sales jumping 46% between Q2 and Q3. More than half of these buyers were new to the brand.

• Honda sold more than 90,000 EVs during the quarter, somewhat behind its competitors. However, key models, such as the CR-V and Accord, continued to see more than 50% of sales go to hybrid-electric buyers.

Bottom line: Q3 proved to be a difficult period for the industry, forcing even the best-performing automakers to concede sales. However, EVs are proving to be a potentially valuable segment for brands, defying negative trends affecting other vehicle types to account for a greater and greater percentage of the market. While most automakers have dialed back plans to launch new electric models, the shift in demand could convince some to revisit their product lineups.

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