The automotive market is experiencing a fascinating period of flux, with new car prices nearing record highs while electric vehicle (EV) sales from major manufacturers like General Motors (GM) and Ford are surging. This article explores the key trends driving these shifts, examining the factors behind rising transaction prices and the impressive growth in EV adoption.
Average Transaction Prices Approach Record Territory
New car prices in the United States have been on an upward trend, with the average transaction price (ATP) reaching $49,740 in December 2024. This figure is just shy of the all-time record of $49,958 set in December 2022. This increase marks the fourth consecutive month of rising prices, with a 1.3% year-over-year increase and a 1.5% jump compared to November 2024.
Factors Contributing to Rising Prices
Several factors are contributing to these near-record prices:
- Strong Luxury Vehicle Sales: Sales of luxury vehicles, particularly those priced above $80,000, boomed in December, increasing by 37% year-over-year. This demand for high-end models significantly impacts the overall average transaction price. In a typical month, about 4.4% of car sales are for vehicles over $80,000, however in December 2024, this figure rose to 5.6%.
- Increased Consumer Confidence: Rising consumer sentiment and confidence, particularly after the election, have encouraged consumers to make emotional purchases like luxury vehicles.
- End-of-Year Demand: December is typically a strong month for car sales, especially for luxury models.
- Higher MSRPs: Automakers have been introducing new, higher-priced 2025 model-year vehicles, with increased manufacturer’s suggested retail prices (MSRPs) on popular models.
Incentives and Discounts
While average transaction prices are high, it’s important to note that incentives and discounts are also significant. The average incentive package in December 2024 was $3,958, representing an 8% discount off MSRP. This is a 44% increase compared to December 2023, as automakers use discounts to compete in the market. Some manufacturers are offering even larger incentives with Volkswagen, Ram, and Nissan offering discounts of over 13% of the ATP.
GM’s Electric Vehicle Sales Surge
General Motors has made significant strides in the EV market, achieving record sales in 2024.
Key Highlights of GM’s EV Performance
- Record Sales: GM sold a record 114,432 EVs in 2024, a substantial increase over previous years. In the third quarter of 2024 alone, GM delivered over 32,000 all-electric vehicles in the U.S., a 46% increase quarter-over-quarter and a 60% improvement year-over-year.
- Market Position: GM is now the second-largest seller of EVs in the U.S., trailing only Tesla.
- Popular Models: The Chevrolet Equinox EV was GM’s top-selling EV in 2024, followed by the Cadillac Lyriq and the Chevrolet Blazer EV. The Chevrolet Bolt EV also contributed to the 2024 sales.
- Overall Growth: GM’s overall vehicle sales reached 2.7 million in 2024, a 4% year-over-year improvement and the highest total since 2019. Electric vehicle sales jumped 50% for the year.
- Ambitious Targets: GM has set a goal to surpass Tesla in EV sales by 2025.
GM’s Strategy
GM is focusing on offering a variety of EV options for different types of drivers, from the luxurious Cadillac LYRIQ to the more affordable Chevy Equinox EV. GM’s strategy has seen a doubling of its EV market share over the course of 2024.
Ford’s Electric Vehicle Sales Reach New Heights
Ford has also experienced impressive growth in its EV sales, setting new records in 2024.
Ford’s EV Sales Performance
- Record Year: Ford sold a total of 97,865 EVs in 2024, a 34.8% increase from 2023. In the fourth quarter of 2024, Ford sold 30,176 EVs, a 16% increase year-over-year.
- Electrified Vehicle Sales: Ford sold nearly 285,600 electrified vehicles in 2024 (+38% year-over-year), including EVs, hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs).
- Sales Growth: Ford’s overall sales for 2024 were over 2.07 million, up 4.2% from 2023, which was double the estimated industry average (2%).
- Record Sales Per Model: Each of Ford’s EV models set new sales records in 2024:
- Mustang Mach-E: 51,745 units, a 27% increase year-over-year, making it the second-best-selling electric SUV in the U.S., behind the Tesla Model Y.
- F-150 Lightning: 33,500 units, a 38% increase from the prior year.
- E-Transit: 12,600 units, a 64% increase.
Ford’s Strategy
Ford’s success is attributed to its diverse EV lineup and promotions such as the “Power Promise” which includes a complimentary home charger and standard installation.
The Impact of EV Sales on Overall Market
The growing sales of EVs, particularly by GM and Ford, are having a notable impact on the overall automotive market:
- Increased Market Share: Electric vehicles are gaining a larger share of the total vehicle market, and this trend is expected to continue.
- Competition: The rise of EVs is intensifying competition within the automotive industry, pushing both established automakers and new entrants to innovate and improve their offerings.
- Incentives: Automakers are offering high incentives for EVs, averaging more than $6,700 per sale, in order to boost consumer adoption.
Conclusion
The automotive industry is at a pivotal moment, characterized by near-record high transaction prices for new vehicles and a significant surge in electric vehicle sales. Luxury vehicle demand, increased consumer confidence, and higher MSRPs contribute to the high prices, while automakers are using incentives to attract customers. Meanwhile, both GM and Ford have seen impressive growth in their EV sales, demonstrating that consumers are becoming increasingly interested in electric vehicles. As the market continues to evolve, it will be crucial for manufacturers to adapt to changing consumer preferences and continue to innovate in the EV space.
Table: Key Sales Data
| Metric | GM | Ford |
| :————————————- | :———– | :————– |
| Total EV Sales 2024 | 114,432 | 97,865 |
| EV Sales Growth 2024 | 50% | 34.8% |
| Total Electrified Vehicle Sales (Ford) | N/A | 285,600 |
| Mustang Mach-E Sales 2024 | N/A | 51,745 |
| F-150 Lightning Sales 2024 | N/A | 33,500 |
| E-Transit Sales 2024 | N/A | 12,600 |
