Reduced Sales Volume in January After Year-End Surge
According to a report by Power and GlobalData, total new vehicle sales in the US for January are estimated to be around 1,087,900 units. This figure includes both retail and non-retail transactions. It is important to note that January usually sees a decline in vehicle sales compared to December. Many consumers choose to make their vehicle purchases in December to take advantage of year-end sales and incentives. As a result, the number of sales in January is usually lower.
Overview of Consumer Spending and Incentives
Consumer spending on new vehicles in January is expected to be nearly $37 billion, representing a 2% decrease compared to the same period last year. In terms of incentive spending per unit, the report estimates it to be around $2,346, which is a significant increase of approximately 74% from January last year.
Impact of Changes in Government Rebate Criteria on Electric Vehicle Sales
In January, the retail share of Electric Vehicles (EVs) is anticipated to drop to 8.1% from 9.2% towards the end of 2023. This decrease is attributed to recent changes in government rebate criteria, which came into effect at the beginning of the month. Thomas King, president of the data and analytics division at J.D., explains, “Changes in the eligibility of many electric vehicles to qualify for government rebates, which took effect Jan. 1, meant many EV purchases that would have occurred in January were made in December.”
Overall, the estimated figures for US vehicle sales in January indicate a decline from December due to consumer preference for year-end sales and incentives. Additionally, changes in government rebate criteria have influenced the purchasing decisions of electric vehicle buyers.