May sees modest increase in new vehicle inventory levels

Excluding plug-in hybrid electric vehicles (PHEVs), hybrid vehicle inventory grew to 301,853 units advertised — a significant increase of 76.5% year-over-year (YoY) and a modest rise of 2.5% MoM. 

Notably, the top three brands dominating hybrid inventory are Toyota, Honda, and Hyundai, collectively accounting for more than 2/3 of the total hybrid inventory in May. 

1. Toyota: 35% of hybrid inventory (105,561 units)
2. Honda: 18% (54,510 units)
3. Hyundai: 15% (45,460 units)

Interestingly, despite accounting for such a high percentage, Toyota's hybrid inventory still saw a decline of 9.3% MoM. Specific models such as the RAV4 and Sienna experienced drops of 4.0% and 9.1%, respectively. 

It’s worth noting that the Camry, Sienna, and RAV4 have transitioned or will transition to being hybrid-only vehicles, which is expected to further influence inventory dynamics moving forward. Other brands have ramped up their hybrid offerings compared to April, with imports generally increasing and accounting for most of the available volume.

The average discount on hybrid vehicles has risen to $2,283, an increase of $182 MoM, indicating a competitive market despite the growing inventory. The average age of hybrid inventory stands at approximately 49 days, significantly lower than the overall average of 78 days, suggesting quicker turnover in this segment. This average discount for hybrids is the highest recorded since January 2023.

On the electric vehicle front, the vehicle inventory supply continues to increase, with 181,000 units available — marking a 5.6% YoY increase, and a 4.2% MoM rise. The Ford Mustang Mach-E led the charge with the largest MoM inventory increase of 22%, followed closely by the Hyundai Ioniq 5 at 18%, and the Ford F-150 Lightning, which saw a sizeable 40% increase. 

While some new models such as the Honda Prologue, Hyundai Ioniq 9, Acura ZDX, Volkswagen ID.Buzz, and Dodge Charger have entered the market since this time last year, the overall inventory increase is not likely attributed solely to these introductions.

Despite the growth, an EV sell-down continues, with the average age of EV inventory currently at 81 days—down from a peak of 103 days in October 2024. This ongoing trend reflects the industry's efforts to balance supply and demand with changing consumer interest in EVs. 

Pricing on EVs declined for the second consecutive month, with the average MSRP falling 1.0% MoM to $62,650. Even more significant though was the percentage of EVs listed below MSRP increasing from 34.9% in April to 41.2% in May. This represents the largest MoM increase in the past three years.