Nine months of strong sales helped buoy the U.S. auto industry for much of 2025, but headwinds from swirling tariff policies and the expiration of a substantial federal tax credit for new electric vehicles (EVs) at the end of September led to a slump in sales in the fourth quarter.
Automakers will sell a projected 16.3 million vehicles in 2025, the best sales year since 2019; however, manufacturers are expected to see a 2.4 percent overall decline to approximately 15.8 million new auto sales in 2026, Cox Automotive said on Dec. 17 in its most recent industry forecast.
This year has been an up-and-down journey for U.S. automakers. Sales surged in the first quarter, as buyers raced to beat tariff-induced price hikes, Cox said, and they remained strong throughout the summer and fall as consumers rushed to buy ahead of the expiration of a $7,500 clean vehicle tax credit under President Donald Trump’s One Big Beautiful Bill Act.
A number of auto manufacturers recorded record EV sales in the third quarter, but sales slumped in October and November after the tax credit expired. EVs made up just 5.4 percent of sales in November after reaching 11.6 percent of total sales in September, Cox Automotive subsidiary Kelly Blue Book stated on Dec. 17.
Ford Motor on Dec. 15 announced it would take a $19.5 billion write-down, the bulk of which will be recorded in 2026, as it retreats from selling large EVs.
Regardless of the turbulence, it was a good year overall for new vehicle sales, according to Cox Automotive senior economist Charlie Chesbrough.
“The fourth quarter is showing the expected slowdown, as headwinds from tariffs, inflation, and reduced EV incentives weigh on the market after nine surprisingly strong months,” he said. “Still, consumer demand has kept the new-vehicle market healthy throughout 2025.”
With a 17.3 percent total market share, General Motors is projected to lead U.S. automakers in sales in 2025. The company’s projected 2.83 million new vehicle sales would be a 5.1 percent increase from 2024.
Toyota Motor North America is expected to post the second-highest U.S. sales total in 2025, with more than 2.52 million new vehicles sold—an estimated 8.4 percent increase from a year earlier. Ford Motor is projected to rank third, with nearly 2.2 million vehicles—up about 5.6 percent from 2024—and Hyundai Motor North America is forecast to place fourth with roughly 1.84 million units, an increase of nearly 8 percent.
Honda recorded a modest 0.6 percent increase in sales, while most other automakers saw sales soften and their market share shrink in 2025, Cox said.
Looking ahead, businesses are expected to rein in fleet purchases, which will likely dip by 6.1 percent in 2026 because of slow job growth, Cox noted. Lease volume is projected to tumble more than 12 percent, and used car sales are forecast to dip by about 1 percent.
Lingering uncertainty surrounding interest rates and federal monetary policy could continue to cast a pall over auto sales volume in the new year, Cox stated.
“Inflation appears to be peaking, and rate cuts this fall and into 2026 will help affordability. Yet uncertainty looms,” Cox researchers said.
