The US auto market put in its strongest performance since 2019 despite punishing tariffs and the removal of EV tax credits. By Stewart Burnett
New vehicle sales in the US rose by roughly 2% during 2025 to reach 16 million units, the strongest annual performance since 2019 despite substantial policy disruption across both domestic and global automotive sectors. Internal combustion engine (ICE)-powered SUVs and pickups drove growth in demand, while electric vehicle (EV) retail share collapsed to 6.6% in December from 11.2% during the same period in 2024.
The US market confronted persistent supply chain disruptions, unpredictable tariff implementation and shifting regulatory frameworks that prompted some consumers to accelerate purchases before potential price increases—particularly the elimination of the federal EV tax credit. Average sticker prices per purchase reached US$47,104 in December, up 1.5% year-on-year, although elevated monthly payments continued to exclude many buyers from the new vehicle market entirely, according to automotive data firm Edmunds.
General Motors secured top seller status for the fourth consecutive year with 17.3% market share and deliveries exceeding 2.8 million units, up more than 5% YoY. Toyota finished in second place with 8.4% sales growth as market share increased from 14.5% to 15.5%, contributing to a broader trend where the four largest manufacturers—GM, Toyota, Ford and Hyundai—gained 2.6% of combined market share while smaller automakers like Rivian experienced marked declines.
Legacy automakers retreated significantly from EV production plans during 2025 as demand weakened following subsidy removal and relaxed emissions regulations. Ford, for example, cancelled the fully-electric F-150 Lightning pickup in the wake of the Novelis aluminium plant fire, while also canning alongside planned next-generation electric truck and van programmes, recording a US$19.5bn charge, while GM took US$1.6bn in charges related to shifting some factory output back toward ICE models from originally intended electric production.
As it stands, analysts are divided on how the US auto market will fare in 2026. Cox Automotive is forecasting a 2.4% decline to 15.8 million units due to weakened economic growth and eliminated EV incentives, while others expect flat or marginally lower performance. Lower interest rates and maturing lease contracts could provide marginal support later in the year, although Detroit executives have been summoned to testify before the Senate Commerce Committee on 14 January regarding persistent affordability barriers facing consumers.
