AUTO

1 in 4 Cars Sold Will Be Electric: What This Means for Sales Trends

January 7, 2025

One in four vehicles sold in 2025 will be electrified, according to Cox Automotive, with electric cars making up 10 percent of total sales.
Auto loan rates are declining, and approval rates are increasing, making vehicles more affordable.
Used car sales are projected to reach their highest levels since 2021.

Electric vehicles (EVs) are no longer niche products for tech enthusiasts or early adopters. They’re becoming everyday cars for everyday people. But let’s face it, the messaging around EVs has been, well, complicated.

Between mandates, sustainability narratives, and charging anxiety, the industry has sometimes stumbled when trying to connect with skeptical buyers. That’s starting to change, and 2025 might just be the year EVs finally hit their stride.

New-vehicle sales are increasing, electric car options are expanding, and affordability is improving. Here’s a closer look at what’s driving these changes and why this might be the perfect time to make the switch to electric.

Automotive Market Starts 2025 Strong with 16 Million Sales in 2024

The automotive market is starting 2025 on a strong note. New-vehicle sales reached approximately 16 million units in 2024, a 2 percent increase from the previous year, according to Cox Automotive’s Kelley Blue Book estimates. This represents the highest sales figure since the pandemic disrupted the industry.

Looking ahead, Cox Automotive forecasts that 2025 will see new-vehicle sales rise slightly to 16.3 million units. While growth remains slow, the upward trend is consistent, marking the third consecutive year of improvement for the industry. General Motors (GM) achieved the highest overall sales in 2024, with Honda and Mazda also experiencing significant growth, contributing to this positive momentum.

“Cox Automotive is optimistic about 2025, with plenty of reasons to believe it will be the best year since 2019,” said Jonathan Smoke, Chief Economist at Cox Automotive. He described the current state of the market as one of “positive momentum,” driven by improving economic fundamentals and increasing consumer confidence. This combination is creating a more favorable environment for buyers and dealers alike.

People are buying cars again, and not just out of necessity.

Electric cars are gaining market share, according to Cox Automotive 2025 Forecast — _{2025 Cox Automotive forecast: steady growth, improved affordability, EV adoption, and rising buyer satisfaction.}

Electrified Vehicles Reach One in Four Sales in 2025

One of the most exciting trends in 2025 is the rise of electrified vehicles, which include hybrids (HEV), plug-in hybrids (PHEV), and full EVs. Cox Automotive predicts that approximately one in four vehicles sold this year will fall into this category. Pure electric cars are expected to make up 10% of total new-vehicle sales, an increase from 7.5% in 2024, while hybrids and plug-in hybrids will account for an additional 15%.

While electrified vehicles are gaining momentum, internal combustion engine (ICE) vehicles are far from disappearing. They still account for a large portion of sales and remain a popular choice for many buyers.

For those who want a mix of traditional and electric benefits, hybrids and plug-in hybrids offer a practical compromise, delivering better fuel efficiency and the convenience of both electric and gas power.
This growth comes from practical benefits and not just a result of mandates or incentives.

Buyers are drawn to lower fuel costs, minimal maintenance, and a quieter, smoother driving experience. The market is expanding with 15 new EV models this year, offering options from affordable commuter cars to high-end luxury SUVs.

Auto Loan Rates Drop as EV Affordability Improves

One of the biggest hurdles for EV adoption has been the price tag. Thankfully, that’s starting to change. Auto loan rates are declining, approval rates are climbing, and manufacturers are offering competitive incentives.

Over the past few months, some eye-catching EV lease and finance deals have been hitting the market. For instance, September through December featured lease offers starting as low as $159 per month for select models. These deals reflect a growing trend of lower lease and finance rates, helping to reduce the upfront costs often associated with EVs.

Plus, new-vehicle inventories are healthier than they’ve been in years, which means buyers have more negotiating power. With a broader selection and competitive offers, shoppers are finding EV ownership more appealing.

Smoke clearly explained it, “Credit availability should continue to expand as loan portfolio performance improves and yield spreads narrow. Auto loan rates have declined, and approval rates are increasing, enabling growing demand.”

Financing a car is getting less painful, and that’s good news for anyone looking at EVs.

Electrify Expo San Francisco test ride demo NIssan LEAF — _{Red Nissan Leaf electric car test drive at Electrify Expo.}

Used Car Sales Expected to Reach 20.1 Million in 2025

If buying a brand-new EV still feels like a stretch, consider going the used route. Used car sales, including both gas and electric vehicles, are expected to reach 20.1 million units in 2025, making this the strongest year for this segment since 2021, the last time records were broken.

While inventory for used EVs remains tighter than for gas-powered vehicles, demand is holding steady, supported by stabilizing dealer profitability and improved economic confidence.

Cox Automotive projects that the Manheim Used Vehicle Value Index, a key measure of used car pricing, will grow steadily, finishing 2025 slightly higher than last year. What does this mean for buyers? While finding the best deals might still require some effort, the market is stable enough that patience and research can lead to quality options.

And with advancements in battery technology, today’s used EVs are better than ever, offering improved range and reliability.

EVs Focus on Fun Experience and Everyday Convenience

Here’s where things get interesting. For years, EVs were promoted as sustainable solutions to help save the planet. While that remains true, this message hasn’t always clicked with everyday buyers. The focus is shifting to what makes EVs practical and fun.

Instant torque delivers an exciting drive, and they come with everyday conveniences that make life easier.

Hands-on experiences are making a real impact. Events like Electrify Expo let people test-drive EVs in a stress-free setting. Getting behind the wheel helps drivers feel the benefits firsthand and lets the vehicle speak for itself.

Electrify Expo Grand Finale in Austin is the Ultimate Weekend for EV Enthusiasts and Curious Minds - Cybertruck, Model 3, F-150 Lightning, Hummer EV and more — _{Tesla Cybertruck leading a lineup of electric vehicles, including Tesla Model 3, Ford F-150 Lightning, and GMC Hummer EV, at Electrify Expo.}

Practical Tips for EV Shoppers

Are you ready to learn more about electric vehicles? Here are some tips to get started:

Do Your Homework: Use resources like CarsDirect and Kelley Blue Book to compare prices, ranges, and features. Whether you’re exploring new vehicles, including gas, full electric, hybrid, plug-in hybrid or even used vehicles, these tools can help you identify the best options for your needs. With rising inventories and competitive deals available in 2025, shopping smartly can help you get the most value for your money.
Take a Test Drive: Visit an event like Electrify Expo or your local dealership to experience what driving an EV feels like. It’s also a great way to compare other options like hybrids or ICE vehicles if you’re unsure which direction to go.
Consider Charging Options: Look into home charging setups and the growing public charging network in your area. Charging infrastructure has come a long way, making EV ownership much more practical than it was a few years ago.
Plan Your Financing Carefully: Lower loan rates and better credit approval odds are making financing more accessible in 2025, but it’s still important to shop for the best terms. Whether you’re considering a brand-new EV or a used vehicle, planning your financing can save you a significant amount in the long run.
Think Long-Term: While the upfront cost of an EV might still be higher than a comparable gas vehicle, the savings on fuel and maintenance can make them a smart financial choice over time. Used EVs also offer a great way to join the electric vehicle market at a lower price point.

Electric Vehicles Offer Practical Options for 2025 Buyers

Electric vehicles are becoming increasingly practical and appealing in 2025, and the automotive market is brimming with opportunities for buyers. Whether you’re upgrading to an EV, considering a hybrid, or sticking with a reliable ICE model, this year’s market offers options for every lifestyle and budget.

With prices coming down, more models to choose from, and growing interest from buyers, the automotive industry is set to meet a variety of needs. Take the time to research, test drive, and plan your purchase to ensure you make the best decision for the road ahead.