Sales of new cars in the US rose about 2% in 2025, analysts estimate, defying a year of extraordinary disruption for an industry where “black swan” events have become routine.
Carmakers confronted supply chain snarls, unpredictable tariffs and the removal of a $7,500 (R123,826) electric-vehicle tax credit, factors that drove some buyers to dealer lots to snatch vehicles before regulations pushed prices higher.
“To say it’s been a sales roller coaster of a year would be an understatement,” said Thomas King, president of OEM solutions at JD Power.
Analysts warned sustaining this growth in 2026 may prove difficult as economic uncertainty and tariff-related costs weigh on consumers.
About 16-million vehicles were sold last year, with internal-combustion-engined (ICE) trucks, SUVs and hybrids fuelling demand. Final figures will be released later on Monday by carmakers including Toyota, General Motors and Hyundai.
While some carmakers bumped up prices of models made outside the US, tariffs did not substantially affect vehicle prices, JD Power found. The average new vehicle retail transaction price in December had been expected to reach $47,104 (R777,694), up $715 (R11,805) or 1.5% from December 2024, the firm said.
Affordability keeps some buyers away
Affordability remained a top barrier for the industry, and executives from Detroit’s car giants have been called to testify about this at a Senate commerce committee hearing on January 14.
“Many price-sensitive shoppers have been pushed out of the new vehicle market entirely as elevated monthly payments put ownership out of reach,” said Edmunds’ head of insights Jessica Caldwell.
Electric vehicles were perhaps the most turbulent part of the market last year. US President Donald Trump axed a hefty consumer tax credit, and championed loosening regulations around fuel economy and emissions. The moves have dampened consumer demand and caused carmakers to pull back on plans to produce electric models.
Sales of EVs are expected to account for 6.6% of retail sales in December, down from 11.2% the prior year, according to JD Power.
Last summer, GM announced it would use some plants to increase production of ICE models, instead of the originally intended EVs. The automaker in October took a $1.6bn charge related to changing its EV plans, and said more charges would be recorded in the fourth quarter.
Ford and Stellantis killed off major EV programmes in 2025.
“We had to come up with a better plan,” Ford CEO Jim Farley told Reuters, as the carmaker said it would take a $19.5bn hit after cancelling the fully-electric version of the F-150 Lightning pickup, and a planned next-generation electric truck and van.
Mixed outlook for auto sales
Analysts remain split on how the car market will fare in 2026. Cox Automotive said sales would decline 2.4%, as slower economic growth and slashed EV incentives dampen demand. Edmunds expected steady or slightly lower sales this year as tariff-related costs hit and economic uncertainty weighs on consumers.
Meanwhile, analysts noted lowered interest rates would likely buoy demand and more leases would mature, restoring stability in the vital section of the market that was upended by the pandemic.
“These dynamics set the stage for a more balanced and potentially stronger performance as 2026 progresses,” JD Power’s King said.
Reuters
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