On the Dash:
- U.S. new vehicle sales rose about 2% in 2025, supported by trucks, SUVs, hybrids, and affordable models.
- Automakers overcame tariffs, supply disruptions, and shifting EV policies, though affordability remained a concern.
- Analysts see an uncertain 2026 outlook, with economic conditions, pricing, and incentives shaping demand.
Despite the automotive industry facing a year marked by supply chain disruptions, shifting tariffs, and changes to EV incentives, U.S. new-vehicle sales rose by roughly 2% in 2025.
On Monday, several automakers reported robust December sales to close out 2025. Notably, Toyota notched an 8% increased in U.S. vehicle sales for 2025, supported by the popularity of affordable cars. Hyundai also posted an 8% increase, aided by surging demand for hybrids.
Domestically, General Motors reported a 6% year-over-year increase in sales, driven by strong demand for pickups and SUVs. However, Stellantis’s U.S. sales slipped 3% compared to 2024, although the automaker built momentum in the second half of last year under new CEO Antiono Filosa.
Although automakers navigated supply chain constraints, unpredictable tariffs, and the removal of EV tax incentives, some buyers accelerated purchases amid concerns that those tariffs and regulations could push prices higher. About 16 million vehicles were sold in 2025, with gas-powered trucks, SUVs, and hybrids driving demand.
Vehicle prices rose modestly in December 2025, with the ATP for new vehicles expected to reach $47,104, up 1.5% from 2024. This increase occurred despite tariffs, which, according to J.D. Power, did not significantly raise overall vehicle costs.
Additionally, affordability remains a major concern, which prompted a Senate Commerce Committee hearing slated for January 14.
The EV segment has also been especially volatile following President Donald Trump’s decision to eliminate a key consumer tax credit and relax emissions regulations. EV retail sales for December were projected to drop significantly to 6.6% from 11.2% a year earlier, according to J.D. Power. Despite the projections, executives from Toyota and Hyundai have confirmed plans to continue their EV investments, even as other manufacturers scale back.
Ultimately, looking to 2026, analysts are divided. While Cox Automotive anticipates a 2.4% decline in sales, Edmunds forecasts flat to slightly lower sales. Factors such as lower interest rates and the expiration of lease maturities are expected to boost demand later in the year.
