General Motors, Toyota’s sales tank as high prices and oil crisis keep buyers away

Top car makers General Motors (GM) and Toyota reported lower sales in the US for the first quarter of 2026. A new report shows that total vehicle sales fell by 5.3% as people struggle with high borrowing costs and expensive car prices.

Affordability Hits the Brakes
Even though gas prices are near $4 per gallon due to the Iran war, buyers are staying home. Experts say the loss of EV tax credits has made electric cars too pricey for many. In fact, EV sales are expected to drop by 28% this quarter. While more people are searching for “pure EVs” online, the high cost of the cars is stopping them from actually buying.

Inventory Rises as Demand Drops
Because fewer people are buying, vehicle inventory levels at dealerships are growing. This means dealers have more cars than customers. This competition could lead to better deals for those who can afford to shop. “It is going to be very competitive,” said one industry CEO.

The Shift to Hybrids
While GM saw a 10% drop, companies like Hyundai and Honda saw gains. These brands are selling more hybrid models and SUVs. As fuel costs stay high, drivers are looking for cars that use less gas but don’t cost as much as a full electric car. Analysts say consumer sentiment is weakening, which might force car companies to offer bigger discounts later this year to keep moving cars off the lots.

Read also: Fuel price pain: Why Australians are rushing to buy used EVs