U.S. Vehicle Sales (October 2025)

U.S. Vehicle Sales Fell Notably in October

• U.S. vehicle sales fell 5.9% month-on-month (m/m) to 15.3 million (annualized) units in October, lagging consensus expectations for 15.5 million units and marking a 15-month low in sales.
• Unadjusted sales volumes were 1.27 million units or 4.5% below year-ago levels. The average daily selling rate (DSR) was 47,086, lower than October 2024's 49,325 daily rate with both calculated over 27 selling days.
• Passenger vehicle sales were down 16.7% year-on-year (y/y) while sales of light trucks were down 1.7% y/y. Light trucks accounted for 84% of last month's sales, above their year-ago 81% share.   

Key Implications

• U.S. vehicle sales were expected to fall in October with the expiration of electric vehicle subsidies, which led to a 23.8% year-on-year decline in the segment. Additionally, the front-loading consumer behavior from earlier in the year also weighed on demand to start the fourth quarter, as tariff passthrough has begun to pick up with the rollout of new model year vehicles. Automakers are expected to gradually rebuild compressed margins over the coming quarters after absorbing most of the tariff impact to date, which is expected to weigh on demand growth moving forward.
• On the tariff front, automakers received a partial reprieve last month with the extension of the automotive parts tariff offset, allowing for up to 15% of a vehicle's content to come from imported parts. This should alleviate some of the pressure on automaker costs, but with the labor market continuing to slow, the price sensitivity of consumers could limit the extent to which automakers can pass on these costs. We currently expect sales to remain soft through the end of the year before recovering gradually through 2026.       

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