American automotive giant General Motors reported a decline in its fourth-quarter sales in the United States, reflecting a broader slowdown in the car market and a particularly sharp drop in electric vehicle purchases. The company announced the figures on Monday, highlighting a challenging final quarter for 2025.
Quarterly Slump Amid Market Headwinds
General Motors delivered 703,000 vehicles in the October to December period, marking a significant decrease of 6.9 percent compared to the same quarter the previous year. This performance aligned with a trend of cautious consumer sentiment, influenced by concerns over a softening job market, persistently high interest rates, and ongoing cost-of-living pressures. Industry analysts at Cox Automotive had estimated an overall US car sales drop of 4.7 percent for the quarter.
Other major automakers also felt the pinch. Honda, Nissan, and Volkswagen joined GM in reporting lower US sales for the fourth quarter. In contrast, Toyota and Stellantis managed to buck the trend and posted increases.
Electric Vehicle Sales Crash After Incentive Expiry
A primary factor behind GM's quarterly decline was a dramatic fall in electric vehicle (EV) sales. The company sold only 25,219 EVs in Q4 2025, which was less than half the volume it achieved in the third quarter. This steep drop is largely attributed to the expiration of a key $7,500 federal tax credit at the end of September 2025.
The credit was terminated earlier than initially planned due to legislation championed by US President Donald Trump. This prompted a surge in EV purchases in Q3 as consumers rushed to avail the benefit, creating a demand vacuum in the subsequent quarter.
Annual Growth and Strong Performers
Despite the weak fourth quarter, General Motors closed the full year on a positive note. The automaker's annual sales for 2025 reached 2.8 million units, representing a healthy 5.5 percent increase from 2024. This growth was powered by robust demand for pickup trucks and crossover utility vehicles, segments where GM offered lower incentives than the industry average but still resonated with buyers.
Notable performers included the Chevrolet Equinox, a compact crossover SUV, and the GMC Sierra lineup of pickup trucks. "Demand for our brands and products is strong at every price point, and we are well-positioned to build on this momentum in the year ahead," stated GM senior vice president Duncan Aldred.
How Rivals Fared
Toyota reported a strong fourth quarter, with sales rising about eight percent to 652,195 vehicles. Its annual sales grew by a comparable percentage, reaching 2.5 million for 2025. Models like the Grand Highlander SUV and the Tacoma pickup truck saw significant year-over-year sales increases.
Stellantis recorded a four percent increase in Q4 sales to 332,321 units. This helped moderate its annual decline to three percent, with full-year sales settling at 1.3 million. Jeff Kommor, head of US retail sales for Stellantis, noted, "With consecutive quarterly sales increases and market share growth, it's clear that we are taking the right steps to reset our business in the US." He also highlighted five new vehicle launches scheduled for 2026.
Policy Shifts and the 2026 Outlook
The year 2025 was marked by a rapidly changing policy landscape for automakers. President Trump announced multiple tariff actions and moved to roll back climate measures implemented under the previous Biden administration. While tariff costs did not lead to major retail price hikes in 2025—partly because dealers sold from existing inventory—analysts warn that consumers may face higher car prices in 2026 due to these tariffs, which could dampen demand.
Cox Automotive estimates that US vehicle sales will reach 15.8 million in 2026, which would be a 2.4 percent decrease from their projection for 2025 sales. The industry braces for continued volatility as it navigates economic pressures and evolving government policies.
