© Reuters. FILE PHOTO: Automobiles for sale are seen at Serramonte Volkswagen in Colma, California, U.S., October 3, 2017. REUTERS/Stephen Lam/File Photo
(Reuters) – U.S. new vehicle sales are expected to rise just 1% to 15.7 million units next year, car shopping website Edmunds said on Wednesday, as demand is likely to come under pressure from high interest rates even as vehicle supply improves.
Electric-vehicle market share is expected to rise slightly to 8% of total new vehicle sales in 2024, from 6.9% in 2023 to date through November, Edmunds added.
“While the year ahead holds the promise of further increased inventory and enticing deals that consumers have eagerly awaited, 2023’s high interest rates are expected to linger, provoking conflicting market dynamics,” said Jessica Caldwell, Edmunds’ head of insights.
However, according to automakers, pent-up demand from the pandemic remains strong.
Companies led by General Motors (NYSE:) and Toyota Motor (NYSE:) have reported robust new vehicle sales so far this year due to improved demand and easing supply-chain problems that allowed them to ship more units to dealers.
Edmunds said its data suggested that new vehicle pricing has peaked, as improved inventory has driven incentives back into the market.
But shoppers seeking options for affordable models will have a tougher time as those vehicles are selling quicker than their more expensive counterparts, Edmunds added.
The transition to full EVs has slowed and hybrids are the more comfortable choice for the majority of Americans who are seeking electrified options, it said.
