It isn’t the end of August, yet according to J.D. Power and GlobalData, it’s already shaping up to be one of the most prosperous months of new-vehicle sales in 2025 with new-vehicle sales projected at 1.48 million units, better than last year by 8.2%, and retail sales is also projected to make up about 1.28 million units, also better than last year by 7.8% or by 4% with one fewer selling day.
Nobody wants to see behind the fake sales figures
According to Dealership Guy News, August is not yet over, but J.D. Power and GlobalData predict that the month will be one of the best months in the history of new-vehicle sales in 2025. Sales of new vehicles will be 1.48 million (an increase of 8.2 percent over the previous year). Out of such transactions, retail sales are projected to comprise approximately 1.28 million units, a 7.8 per cent growth, or 4 per cent growth, considering one less selling day.
Consumers are heading towards another historical record of $54.6 billion in aggregate new-car consumption on a dollar basis, and average monthly payments are rising to a record of $743. That seems to be a strength, but, as J.D. Power points out, the data could not be more warped.
Federal EV credit drives artificial demand
The federal $7,500 lease credit expires by Sept. 30, so tons of buyers are flocking to the market before that period. The forecast further showed that EV retail share is trending towards 12 percent in August, an increase of 9.5 percent over the same period last year.
There is a short-term spike in the market
It has 197,000 EV units in inventory, which is only 10,000 less than July and a strong 59-day supply, Tyson Jominy, SVP of data and analytics at J.D. Power, said. However, similar to the magic in Cinderella, this magic is time-limited–by the stroke of midnight on October 1, the federal subsidy will be discontinued, and this inventory will turn into expensive pumpkins in the hands of car manufacturers and dealers.
August numbers are puffed up by Labor Day weekend
One of the best-selling weeks of the year, Labor Day weekend, is included in the August reporting period, balancing out sales figures. That would mean that September would lose one of its largest drivers on the demand side and would have to rely almost solely on EV urgency to stay up to speed.
To make matters worse, incentives in the wider market are subdued, and lease returns are absent. The report notes that incentives on new-vehicle sales are averaging only $3,105 per unit, or 6.2 percent of MSRP, unchanged since last year and less aggressive than the customary late-summer push.
Lease cycle normalization is yet to be achieved
Following the 2022 leasing pullback, many fewer customers are arriving at showrooms with cars to trade. That cycle has not settled in, and without that, the momentum dealers typically depend on to run through Q4 is skimpy.
August could be among the final over-inflated months of 2025, since by the time the $7,500 credits run out and the demand spike of the Labor Day boost wears off, the scaffolding is removed. It’s at that stage that dealers that can switch gears the least, by narrowing the margins on EVs, leaning towards used, or restructuring offers around payments, will be the ones retaining volume when others go dry.
Although the forecast of 1.28 million retail sales by J.D. Power is a positive year-over-year growth of 7.8 percent in August, the market dynamics clearly shows that the retail sales would encounter several challenges during August since the federal EV incentives would run out soon and the seasonal retail sales trends would normalize, and thus dealers should devise new ways of sustaining their sales momentum in the last quarter of 2025.