2025 auto sales in the US are expected to be the best since 2019

DETROIT – U.S. new car sales are expected to rise to their highest level since 2019 next year, driven by lower interest rates and improved affordability, according to industry analysts.

Cox Automotive expects sales of new light-duty vehicles to reach 16.3 million in 2025, slightly ahead of S&P Global Mobility and Edmunds forecasts of around 16.2 million sales next year. That revenue would rise from expectations of 15.9 million to 16 million this year, marking the highest result since then around 17 million in 2019.

This would correspond to a forecast increase in sales of new cars and trucks of 2.5% or less. The increase is expected to be due to continued “normalization” of vehicle inventories, incentives/discounts from automakers, and easing of financing and lending rates.

“Consumers are still feeling the pinch, but the market has become a little friendlier to car buyers than it was earlier in the year,” Jessica Caldwell, head of insights at Edmunds, said in a news release Tuesday.

One of the biggest growth markets is likely to be entry-level and cheaper vehicles. The industry is struggling with this Years with increased prices and lower inventory levels since the coronavirus pandemic.

Edmunds Reports The average new vehicle transaction price was $47,465 in 2024, a decrease of 0.8% compared to $47,851 in 2023 and an increase of 27.2% compared to $37,310 in 2019.

This is despite a forecast year-over-year decline in the US electric vehicle market leader Teslas sales for the first time since 2014.

“The three largest manufacturers are Tesla, Hyundai Motor Group and General Motorswith GM seeing the largest year-over-year market share gain at the brand level at 2.7%. Even though Tesla’s market share has fallen below 50%, the Model Y and Model 3 continue to hold the top two spots, said Stephanie Valdez Streaty, Cox director of industry insights, on Tuesday. “Various other models are collectively taking market share away from Tesla.”

Cox expects about 25% of new car sales to be electrified in 2025, including more than 10% penetration of all-electric models.

Valdez Streaty and others warned that electric vehicle sales could be weaker if federal consumer credits for vehicle purchases of up to $7,500 offered by the Trump administration were eliminated sworn to kill.

Analysts warned of regulatory uncertainty ahead of the presidential election Donald TrumpThe inauguration could impact sales of new U.S. vehicles. Above all Trump’s tariff threats could impact vehicle production in Canada and Mexico.

Cox Automotive chief economist Jonathan Smoke said the tariffs on these countries, which Trump said could reach 25%, would represent “a radical disruption” to the U.S. new car market.

“We know that unexpected twists and turns can come with policy changes, but some key assumptions we make are that most of these changes are likely to take time and are likely to actually stimulate demand before they are implemented.” Smoke said Tuesday during a virtual briefing. “Specifically, when it comes to tariffs, we do not assume that any major new tariffs will be introduced.”

The expected increase in U.S. new car sales due to higher incentive rates and an expected drop in prices could actually be counterintuitive for some automakers’ profits next year, according to Wall Street analysts.

“We continue to see signs that pricing is not sustainable,” Wells Fargo analyst Colin Langan said in an investor note on Monday, citing rising inventory levels, increasing incentives, declining dealer profits per vehicle and other overall reduced pricing power of automakers.

Prices remain near record highs, but growth has slowed, which is good for car buyers but bad for businesses.