General Motors has overtaken rival Toyota Motor to become the top-selling US automaker in 2023, as easing supply constraints and increased demand pushed the industry to its best year since the coronavirus pandemic.

The company expects to sell 2.6 million new cars in the U.S. in 2023, up 14.1 percent from 2022, while Toyota's annual sales rose 6.6 percent to about 2.25 million cars.

New car sales in the United States last year were about 15.5 million units, with electric cars — including hybrid cars — accounting for roughly 17 percent.

American car sales

A steady recovery in U.S. auto sales has bolstered other signs that the U.S. economy is absorbing the shock of a rapid rise in interest rates without slipping into recession, although some analysts have warned that higher borrowing costs could negatively impact demand this year.

“High vehicle prices and high interest rates continue to be a problem for the industry at this time,” said Cox Automotive.

Car dealers were forced to offer generous offers and discounts in December; To liquidate old inventory after two years of withdrawal from promotions.

“This is the third year in a row that U.S. consumers spent more than half a trillion dollars on new cars,” JD Power said in a statement last month.

Electric vehicles will account for the largest share of consumer spending by 2023.

Sales of General Motors and Toyota

Sales of electric cars, which include hybrid cars and all-electric models, rose 30.4 percent to 657,327 cars, accounting for 29.2 percent of its total sales in the U.S., Toyota said Wednesday.

Total sales of electric cars (BZ4X) and (Lexus RZ) reached 14,715 units in 2023, representing 2.23 percent of total electric car sales.

General Motors sold 75,883 electric vehicles, and the automaker expects strong demand to continue through 2024. Total auto sales in the U.S. are expected to reach 16 million vehicles this year.

General Motors is also offering $7,500 worth of rebates on its electric cars.

Hyundai's sales of electric cars rose 11 percent year-on-year to 55,783 vehicles, with Mazda and Honda also posting higher annual sales.

Electric car sales in the U.S. are expected to reach eight percent of total car sales by 2023, a figure that will rise to ten percent this year, Cox added.

But higher interest rates will also affect demand for electric cars, analysts say.