According to a newly released report by Cox Automotive, the U.S. automotive market is poised for a promising 2025. With 2024 ending on a high note, fueled by economic stability and consumer confidence, the industry is set to achieve its strongest performance since 2019.
Key highlights from 2024:
- New Vehicle sales: Surpassed projections, reaching nearly 16 million units, a 2% increase from 2023.
- Top performers: General Motors retained its title as the best-selling automaker, while Honda and Mazda posted significant growth.
- Lagging brands: Stellantis and Tesla reported declines, standing out in an otherwise growth-driven year.
Jonathan Smoke, Chief Economist at Cox Automotive, asserts, “2024 closed with remarkable momentum, and we’re optimistic that 2025 will bring even stronger results.” He added, “The industry is benefiting from a ‘Goldilocks economy’—not too hot, not too cold—which drives positive consumer sentiment and dealer confidence.”
2025 outlook
Cox Automotive projects 2025 new vehicle sales to reach 16.3 million units, marking the third consecutive year of growth. In addition, used-vehicle sales are expected to hit a milestone, with retail sales climbing to 20.1 million units, the strongest performance since 2021.
Moreover, affordability challenges are expected to ease as:
- Auto loan rates decline.
- Credit approval rates rise.
- Inventory volumes increase, boosting incentives.
Electrification goes mainstream
EVs are also anticipated to comprise 25% of total sales in 2025:
- EV sales growth: Pure EVs will capture 10% of the market, up from 7.5% in 2024.
- Hybrid and plug-in vehicles: Expected to account for 15% of sales.
- ICE vehicle decline: Sales of internal combustion engine vehicles will fall to 75% of total volume, the lowest level on record.
This trend is supported by a wave of 15 new EV models, expanding infrastructure, and state-level incentives.
On the other hand, resolving uncertainties in tax policy and stabilizing interest rates have fostered economic optimism. The predicted GDP growth of 2.6% for 2025- which aligns with pre-pandemic levels- provides a stable foundation for automotive sales.
Enhanced buyer satisfaction with omnichannel retail
The rise of omnichannel retailing has significantly transformed the car-buying experience. According to the 2024 Car Buyer Journey Study, 75% of buyers report being “highly satisfied” with their experience, highlighting record satisfaction levels. Additionally, forward-thinking dealers are leveraging technology to streamline the purchasing process, which increases efficiency and boosts buyer confidence.
As the U.S. auto market enters 2025, robust consumer demand, improving affordability, and a strong economic backdrop suggest another year of progress for dealers and manufacturers alike. “We are ready to ride this wave of optimism into the new year,” Smoke concluded.
