Autodata and Wards Intelligence reported that light vehicle sales totaled 15.3 million on an annual basis in October — that’s down more than a million, or 6.7%, from the previous month.

This is important because auto sales can be a signal of how a lot of different players in the economy are doing: automakers, autoworkers, autodealers, and consumers who are contemplating a new set of wheels.

Motor vehicle sales didn’t fall into a pothole in October because consumers are tapped out from inflation or because automakers have jacked up prices because of tariffs. Instead, it’s all about federal subsidies for electric vehicles. They’ve been in place for years, until the Trump administration canceled them beginning Oct. 1.

So, “August and September, anyone who still wanted to get that credit tried to buy an electric vehicle,” said Nationwide economist Ben Ayers. “And once that expired, EV sales really fell off the table.”

With federal subsidies, EVs reached about 8% of overall sales in the U.S. Both drivers and environmentalists like them. But with subsidies gone, EV sales aren’t likely to fully rebound for months or even years, according to Garrett Nelson at CFRA Research.

And that’s for one main reason: cost.

“The average EV is 16% more expensive. So if you look at September, about $58,000. The average new vehicle cost about $50,000, which was a record high,” Nelson said.

With federal support for now EVs gone, automakers aren’t likely to invest in new technology and production. Instead, “we’re expecting to see internal combustion engine vehicles retake some of that market share from EVs that they had lost over the last few years,” Nelson said.

Gas-electric hybrids, meanwhile, aren’t affected by the end of federal EV subsidies.

“The hybrid market is red hot right now,” said Nelson. “Four automakers invested very heavily [and] are now benefiting from that in terms of market-share gains: Toyota, Honda, Ford, and Hyundai-Kia.”

EV sales are still growing strongly abroad, especially in Europe and China. Tesla is the only major U.S.-based auto company making a significant play in those markets.

But lately, it’s been struggling. Sales in Europe have fallen sharply, partly because of Elon Musk’s political unpopularity there, per Columbia Business School climate economist Gernot Wagner.

In China, Tesla’s problem isn’t politics; it’s prices. “There are cheaper, better electric vehicles available on the market,” he said.

Tesla’s fiercest competitor — Chinese automaker BYD — sells new EVs for as little as $10,000, which is just a fraction of the cost of a new Tesla.

Correction (Nov. 5, 2025): A previous version of this story misstated the annual number of light vehicle sales for October.