Car sales are down, but electric vehicle sales are booming

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Prices of used cars are still rising

Because of a recent shortage, sales of new cars are lower than last year and significantly lower than in 2019. But a report from Kelley Blue Book (KBB) shows that sales of electrified vehicles (EV), including plug-ins, hybrids, and plug-in hybrids, are increasing at a record pace.

In the third quarter of this year, the overall new-vehicle market dropped by more than 13% compared to 2020. At the same time, sales of EVs surged by more than 60% and accounted for 10.4% of total vehicle sales, an all-time high. 

Tesla and Toyota lead the EV pack

Sales of vehicles with hybrid engines that use a gasoline engine to recharge the battery while driving were more than double the number of purely electric vehicles sold during the period. When it comes to electrified vehicles, Tesla and Toyota dominate U.S. sales. Tesla is the best-selling plug-in EV, while Toyota is a leader in cars with hybrid engines.

General Motors and Ford may quickly catch up, however. Both automakers have launched ambitious EV plans and GM is scheduled to introduce an electric version of the Hummer before the end of the year.

Ford has already released an EV version of its iconic Mustang and has begun deliveries of its compact pickup truck, the Maverick, which has a hybrid engine. The automaker’s all-electric F-150 Lightning pickup begins production in early 2022.

“Toyota has long dominated the market when it comes to hybrid powertrains, and its leadership today is unquestionable,” KBB said in a press release. “Through the first nine months of 2021, more than 24% of combined Toyota and Lexus sales have been hybrid vehicles. More than 60% of all hybrid-electric vehicles sold industry-wide in Q3 came from Toyota Motor Company, a position nearly as dominant as Tesla.”

Used car prices still going up

Meanwhile, the sticker prices on used cars continue to rise. After a big gain in September, an industry report found that prices continued to rise during the first two weeks of October.

The Manheim Used Vehicle Value Index rose 8.3% over the month of September. At mid-month, the average value of a used car or truck was 37% higher than in October 2020, and is well into record territory. 

And that’s just what dealers are paying for used cars at auction. Consumers generally pay much more, depending on local market conditions.

Cox Automotive, which publishes the report, expects demand for used cars and trucks to remain intense since the new car shortage isn’t expected to end any time soon.

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