DETROIT — U.S. sales of new vehicles are expected to have struggled during the third quarter amid economic and political uncertainties, as well as elevated interest rates and prices, according to industry forecasters.

Sales are projected to fall roughly 2% during the third quarter compared with the same time in 2023, to about 3.9 million vehicles sold, according to Cox Automotive and Edmunds.com. That would be a roughly 5% decrease compared with the second quarter of this year.

Analysts note that the Federal Reserve‘s decision last week to cut rates was a step in the right direction, but it does not necessarily guarantee a major uptick in auto sales through the rest of the year.

“2024 has been a volatile year for the new vehicle market, and more of the same is expected in Q4,” said Charlie Chesbrough, Cox Automotive senior economist. “Affordability remains the main obstacle to a stronger market, but it is improving, so we remain optimistic on the outlook for industry sales.”

Both Cox and Edmunds expect light-duty U.S. vehicle sales to total about 15.7 million vehicles in 2024. Edmunds has maintained its guidance since the beginning of the year, while Cox lowered it from an initial forecast of 16 million.

Jessica Caldwell, Edmunds’ head of insights, said the current market is just too expensive for many consumers, limiting the number of Americans who can purchase a new vehicle.

“Who can afford new cars seems to be the big issue. People, on average, are having to finance $40,000 for a new car,” she told CNBC. “The new market is quite limiting for a lot of buyers.”

The average transaction price for a new vehicle is down from a year ago but remains elevated compared with historical levels at $47,870, according to Cox.

Honda Motor and Ford Motor are expected to be among the only major automakers to experience growth during the third quarter compared with a year earlier, according to forecasts. Those with the biggest losses are expected to include Stellantis, Toyota Motor and BMW.

Stellantis’ sales, which Cox forecasts to be off as much as 21% in the third quarter from a year earlier, have been in a freefall for more than a year. CEO Carlos Tavares has prioritized pricing and profits over market share, especially with the automaker’s crucial Jeep and Ram brands.

Regarding electric vehicles, sales are growing but are still slower than many had previously anticipated. Sales of EVs are expected to increase about 8% during the third quarter compared with a year earlier, according to Cox.

The projected rise in EV sales comes despite a forecast decrease in sales of 2.4% during the quarter for U.S. EV leader Tesla, Cox reports. Tesla, which has dominated EV market share for years, is expected to have its share drop below 50% for the second consecutive quarter, according to Cox.

EV sales are being heavily assisted by incentives. While average transaction prices for new EVs is anticipated to be flat year over year, incentives for the vehicles are expected to have increased, to represent 13.3% of the average transaction price of the vehicles. That’s the highest rate so far this year and more than 80% higher than incentives for traditional vehicles with internal combustion engines.

The EV incentives include an up to $7,500 federal credit from the U.S. government for consumers to purchase or lease an electric vehicle. Not all new EVs qualify for the incentive, unless they’re leased.