US new-car market feels lingering impact of slow BEV demand

20 February 2026

New-car sales in the US are expected to fall in February. The market is under numerous pressures, including the lingering impact of slow battery-electric vehicle (BEV) demand. JD Power reveals its latest monthly outlook.

Total new-vehicle sales, including retail and non-retail transactions, are projected to reach 1,183,000 units this month. This means a 3.8% year-on-year decrease, even with 24 working days in February 2026, the same as a year ago.

The seasonally-adjusted annualised rate (SAAR) is expected to reach 15.6 million units, down 0.6 million deliveries from February 2025.

New-vehicle retail sales are projected to reach 931,400 units, a 4.6% year-on-year decrease. The SAAR for retail new-vehicle sales is expected to be 12.6 million units, down 0.6 million units from February 2025.

BEVs shape market performance

The February sales pace shows a modest improvement over January, but will be down from a year prior. As in January, performance is being shaped by depressed BEV retail demand, explained Thomas King, president of OEM solutions at JD Power.

All-electric cars are expected to account for just 6.6% of retail sales, down 1.8 percentage points (pp) from a year ago. Elevated transaction prices continue to weigh on volumes through ongoing affordability pressure.

Despite the relatively slow start to the year, an accelerated sales pace is expected across 2026, starting in March. This is traditionally a high-volume sales month with elevated promotional activity from manufacturers.

Average retail transaction prices are expected to rise 2.7% to $46,303 (€39,349) from a year ago. Non-BEV prices look set to increasing 3% to $46,097, and fully-electric prices increase by 2.6% to $46,528.

For BEVs, reduced subsidies, higher pricing and more modest discounting continue to influence shopper behaviour and segment mix.

The average manufacturer’s incentive spend per vehicle is on track to reach $3,293. This is $63 higher than 12 months ago. However, the changes in average discounts are heavily influenced by declining BEV sales.

Discounts on these models are expected to average $10,356 in February, down $1,664 year on year. Meanwhile, discounts on non-BEVs are projected at $3,085, up $346. As a percentage of MSRP, discounts on these models should reach 6% in February, up 0.6pp from a year ago.

Affordability pressure remains in US

Affordability pressure remains significant, with the average monthly finance payment reaching $811, up $32 from a year ago. In response, more consumers are turning to 84-month loan terms. These are expected to account for 12.7% of financed sales this month compared to 7.7% in February 2025.

Easing interest rates and strong used-vehicle values are providing some relief to buyers facing elevated monthly payments. The average interest rate for new-vehicle loans is 6.7%, a decrease of 31 basis points (one basis point equals 0.01%).

The average used-vehicle price is $29,488, up $448 from 12 months ago. This reflects the continued low supply of recent model years due to lower new-vehicle production during the pandemic.

The strength of used-vehicle prices continues to be good news for new-vehicle buyers with a trade-in. Average trade-in equity sits at $7,013, essentially flat from February last year. However, the number of new-vehicle buyers with negative equity on their trade-in is expected to reach 31.5%. This is an increase of 3.4pp year on year.

Spending set to be lower

Regarding total consumer spend, the elevated transaction prices in February are not quite enough to offset the lower sales pace. Consumers are on track to spend nearly $41.3 billion on new vehicles this month, 2.4% lower than a year ago.

Retailer profit per unit, including vehicle gross plus finance and insurance income, is expected to be $2,524. This is up $83 from February 2025 and up $160 from last month. Total aggregate retailer profit from new-vehicle sales is projected to be $2.3 billion, down 1.8% from last year.

‘Looking ahead, multiple automakers have publicly stated their intent to increase their sales volume in 2026. However, given total new-vehicle sales this year are expected to be similar to a year ago, and few if any automakers are planning for a sales contraction, competitive intensity can be expected to rise in the coming months,’ King said.

Sales details

• Fleet sales are expected to total 251,681 units in February, down 0.4% from February 2025. Fleet volume is expected to account for 21.3% of total light-vehicle sales, up 0.7pp from a year ago.
• Internal-combustion engine (ICE) vehicles are projected to account for 78.7% of new-vehicle retail sales, up 2.6pp year on year.
• Hybrid electric vehicles (HEVs) are expected to account for 13.5%, up 0.1pp.
• BEVs are expected to account for 6.6%, down 1.8pp.
• Plug-in hybrid vehicles (PHEVs) are on pace to make up 1.1%, down 1pp from February 2025.
• US final-assembly vehicles are expected to make up 55.6% of sales in February, up 4.4pp from a year ago.

Retail details

• Retail inventory levels are currently at 2.19 million units, a 1.4% increase from February 2025.
• The industry’s supply inventory days hit 65 days in February, up from three days.
• The average new-vehicle retail transaction price in February is expected to reach $46,303, up $1,225. The transaction price as a percentage of MSRP was 89.1% in February, down 0.2pp.
• The average new-retail transaction price for ICE and hybrid vehicles is expected to reach $46,097, up $1,329.
• The average new-retail transaction price for BEVs is expected to reach $46,528, up $1,169.
• Retail buyers are on pace to spend $41.3 billion on new vehicles, down $1 billion.
• Average incentive spending per unit is expected to reach $3,293, up $63.
• Incentive spending as a percentage of the average MSRP is expected to decrease to 6.3%, down 0.1pp.
• Average incentive spending per unit for ICE and hybrid vehicles is expected to reach $3,085, up $346.
• Average incentive spending for BEVs is expected to reach $10,356, down $1,664.
• Leasing is expected to account for 24.4% of sales this month, flat from a year ago.

Dealer details

• The average time a new vehicle remains in the dealer’s possession before sale is expected to be 59 days in February, up from 58 days a year ago.
• More than a quarter (26%) of vehicles were sold in less than 10 days in February, down 4.3pp.
• Average monthly finance payments are on pace to be $811, up $32 from February 2025. The average interest rate for new-vehicle loans is expected to be 6.72%, down 0.3pp.
• So far in February, average used-vehicle retail prices are $29,488, up $448.
• Trade-in equity is trending towards $7,013 this month, down $16.
• In terms of trade-ins, 31.5% are expected to carry negative equity this month, up 3.4pp.
• Finance loans with terms greater than or equal to 84 months are expected to reach 12.7% of finance sales this month, up 1.8pp.

Electrification Outlook

Tyson Jominy, senior vice president of OEM customer success at JD Power, noted the BEV share is holding around 6%. This is nearly 2pp below last year. It is also far from the high driven by changes in US policy in the third quarter of 2025.

‘The pullback is concentrated in the mass market, where BEV share contracted to 1.9% from 4% a year ago,’ he said. In contrast, BEVs represent over 26.4% of premium sales year to date, a figure which includes direct-to-consumer brands, and only 5pp below last year’s pace.’