Khaberni - Analyst estimates indicated a 2% increase in new car sales in the United States in 2025, overcoming a year characterized by unusual disruptions in a sector where exceptional and unexpected events with significant consequences have become the norm.
Automakers faced issues with supply chains, unexpected tariffs, and the cancellation of a $7,500 tax credit for electric vehicles - factors that drove some buyers to dealerships to purchase cars before regulations could raise prices.
Thomas King, the head of OEM solutions at J.D. Power, said, "Saying that the year was volatile in sales would be an understatement."
Analysts warn that maintaining this growth in 2026 could be challenging, with economic uncertainty and the costs of tariffs pressing on consumers.
About 16 million cars were sold last year, with gasoline-powered trucks, SUVs, and hybrid vehicles driving the demand. The final figures are due to be released later on Monday from car manufacturers including Toyota Motor, General Motors, and Hyundai Motor.
According to J.D. Power, some car manufacturers raised prices of models manufactured outside the United States, but tariffs did not significantly impact car prices. The company said the average retail transaction price for a new car in December was expected to reach $47,104, an increase of $715 or 1.5%, compared to December 2024.
However, affordability remains a major obstacle for the sector, and top automotive executives from Detroit were called to testify about this in a Senate Commerce Committee hearing on January 14th.
Jessica Caldwell, the head of insights at Edmunds, said, "Many price-sensitive shoppers were forced entirely out of the new car market, as high monthly install payments have made owning a car difficult."
Electric vehicles were perhaps the most disrupted category in the market last year. President Donald Trump canceled a significant consumer tax credit and supported the easing of regulations related to fuel economy and emissions. These actions curbed consumer demand and forced car manufacturers to scale back plans for producing electric models.
J.D. Power said that electric vehicle sales were expected to account for 6.6% of retail sales in December, down from 11.2% the previous year.
Analysts are divided on how the car market will perform in 2026. Cox Automotive predicted that car sales would decrease by 2.4%, as economic growth slows and incentives for electric vehicles are reduced, weakening demand. Edmunds anticipated sales to either stabilize or decrease slightly this year, with rising costs related to tariffs and ongoing economic uncertainty affecting consumers.
Meanwhile, analysts suggest that falling interest rates are likely to boost demand, along with the expiration of more leasing contracts that offer an ownership option, helping to stabilize this important sector of the market that has been shaken by the pandemic.
