U.S. Vehicle Sales (August 2025)

U.S. Vehicle Sales Fell Modestly in August

• U.S. vehicle sales fell 2.9% month-on-month (m/m) to 16.1 million (annualized) units in August –on-par with market expectations.
• Unadjusted sales volumes were 1.45 million units or 3.0% above year-ago levels. The average daily selling rate (DSR) was 53,877 – calculated over 27 days – 6.8% above August 2024's 50,441 daily rate calculated over 28 days.
• Passenger vehicle sales fell 7.6% year-on-year (y/y) while sales of light-trucks rose 9.4% y/y. Light-trucks accounted for 83% of last month's sales, higher than its year-ago 81% share.   

Key Implications

• U.S. vehicles sales retreated in August but remained near a stable level as promotions to capitalize on expiring electric vehicle (EV) subsidies helped to boost EV sales by 23% year-on-year. In addition, consumers have also likely been attempting to secure purchases prior to the full rollout of 2026 model year vehicles, which are expected to carry larger price increases from tariffs that up to this point have been primarily absorbed by automakers. However, the eventual price increase may be less than previously expected as most auto imports are now subject to tariffs of 15% or less.
• Still, as EV subsidies expire at the end of the month and price increases work their way through the market, we expect to see vehicle sales soften through year-end. This is also expected to be driven in part by a growing deterioration in the labor market, with Friday's employment report likely to show another soft print for job growth. While the Federal Reserve is expected to respond to these risks, upside risks to inflation from tariffs will keep rate reductions gradual this year. For now, economic uncertainty remains elevated, but the rubber will hit the road on multiple fronts over the coming months which will help to clarify expectations for vehicles sales moving forward.       

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