US auto sales defy regulatory uncertainty to rise 2% in 2025

[DETROIT] Sales of new cars in the United States rose about 2 per cent in 2025, defying extraordinary disruptions all year in an industry where “black swan” events have become routine.

Automakers sold 16.2 million vehicles in the US last year, a 2.4 per cent increase from 2024, according to research firm Omdia.

Several car companies on Monday reported strong December sales to close out the year. Toyota Motor notched an 8 per cent increase in US vehicle sales for 2025, supported by the popularity of its affordable cars, a category Detroit carmakers have largely abandoned.

Hyundai Motor also posted an 8 per cent increase for 2025, helped by surging demand for hybrids.

General Motors reported a 5.5 per cent increase for the year, boosted by sales of large pickup trucks and SUVs as well as electric vehicles. Stellantis’ US sales slipped 3 per cent compared with 2024, although the automaker built momentum in the second half of last year under new CEO Antonio Filosa. Automakers confronted supply-chain snarls, unpredictable tariffs and the removal of a US$7,500 electric-vehicle tax credit, factors that drove some buyers to dealer lots to snatch up vehicles before regulations pushed prices higher.

“To say it’s been a sales roller coaster of a year would be an understatement,” said Thomas King, president of OEM solutions at J.D. Power.

Analysts warn that sustaining this growth in 2026 may prove difficult as economic uncertainty and tariff-related costs weigh on consumers.

While some automakers bumped up prices of models made outside of the US, tariffs did not substantially affect vehicle prices, J.D. Power found. The average new-vehicle retail transaction price in December had been expected to reach US$47,104, up US$715 or 1.5 per cent from December 2024, the firm said.

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Still, affordability remained a top barrier for the industry, and executives from Detroit’s auto giants have been called to testify about this at a Senate Commerce Committee hearing on Jan 14.

Randy Parker, CEO of Hyundai Motor North America, said 2026 is going to be “very challenging.”

“Affordability is going to be the key,” he said.

Toyota Motor North America executives said they expect prices to creep up this year as tariff-related costs set in. “I do think in 2026 you will see some fairly significant price-ups,” said Andrew Gilleland, senior vice-president of automotive operations at Toyota Motor North America.

Electric vehicles were perhaps the most turbulent part of the market last year. US President Donald Trump axed a hefty consumer tax credit and championed loosening regulations around fuel economy and emissions. The moves have dampened consumer demand and caused automakers to pull back on plans to produce electric models.

Sales of EVs are expected to account for 6.6 per cent of retail sales in December, down from 11.2 per cent the prior year, according to J.D. Power.

Executives from Toyota and Hyundai said on Monday they planned to continue their EV investments, even as much of the market is backpedaling. The automakers were criticised years ago for not investing enough in EVs and instead focusing on hybrids.

Mixed outlook

Analysts remain split on how the auto market will fare in 2026. Cox Automotive said auto sales would decline 2.4 per cent, as slower economic growth and slashed EV incentives dampen demand.

Automotive data provider Edmunds expected steady or slightly lower sales this year as tariff-related costs hit and economic uncertainty weighs on consumers.

Meanwhile, analysts note that lowered interest rates would likely buoy demand and more leases would mature, restoring stability in that vital section of the market that was upended by the pandemic.

“These dynamics set the stage for a more balanced and potentially stronger performance as 2026 progresses,” said J.D. Power’s King. REUTERS