US Auto Sales Hold at 16.5 Million Annual Rate in July as Buyers Shift to Hybrids

U.S. light vehicle sales remained resilient in July, totaling 1.38 million units and reaching a seasonally adjusted annual rate (SAAR) of 16.5 million, according to a Macquarie report published Tuesday. While total sales were down 2% year-over-year, the SAAR marked the fifth consecutive month above the 16 million unit threshold, the longest such streak in over five years.

Hybrid Demand Accelerates

The most significant trend in the July data was the continued consumer pivot to hybrid electric vehicles (HEVs). HEV penetration reached 15.8% of the total market, with several key automakers posting substantial year-over-year sales growth.

• Hyundai-Kia hybrid sales surged 62%.
• Toyota hybrid sales rose 22%.
• Honda hybrid sales climbed 15%.

Toyota maintained its dominance in the segment, commanding approximately 50% of the hybrid market, while Hyundai-Kia's share grew to nearly 20%.

Battery-Electric Sales Weaken

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In contrast to the strength in hybrids, the battery-electric vehicle (BEV) market showed signs of cooling. BEV penetration fell to below 6% in July, a notable decline from the peak of 11.6% recorded in September 2025.

Even market leader Tesla was not immune, seeing its sales decline 21% from the previous year, though its share of the BEV market increased to 55%. The report notes that rising battery prices have impacted BEV profitability and demand as manufacturers increase vehicle prices.

Pricing and Market Share

Data from JD Power showed the average transaction price for a new vehicle was $45,369 in July, up 1% year-over-year but down 2% from the prior month. Automakers spent less on incentives to attract buyers, with average spending falling 10% from the previous year to $3,194 per unit.

The shift in powertrain preference was reflected in overall market share. Toyota and Hyundai-Kia saw their combined share increase by 100 basis points to 27.7% compared to last year. Meanwhile, the combined share for GM and Ford fell by 150 basis points to 28.8%.