More new cars are projected to be sold this year than in 2023, with sales numbers set to rise slightly in 2025 amid an uncertain auto environment, according to S&P Global Mobility.
S&P, in a Dec. 19 statement, predicts U.S. auto sales volume to be 15.8 million units this year. This is an increase of more than 2.5 percent from the 15.4 million estimated for 2023. Sales for December are expected to register a “solid finish to close out the year” at 1.45 million units, up from 1.36 million in November.
It said electric vehicle (EV) sales could advance in December despite lower inventories because current federal EV incentives may be withdrawn next year.
For 2025, S&P calculates new vehicle sales to rise by 1.2 percent to hit 16.18 million units.
Next year “brings with it mixed opportunities and uncertainty for the auto industry as a new administration and policy proposals take hold,” said Chris Hopson, a company manager.
He said the affordability issues that limited new vehicle demand for much of this year are not expected to be “resolved quickly” in 2025.
“Vehicle pricing levels are expected to decline but remain high; interest rates are expected to shift further downwards, but inflation levels are anticipated to remain sticky, and new vehicle inventory should also progress, but careful management is expected too. Combined with an uneasy consumer, we project this translates to mild growth prospects for U.S. auto sales,” he said.
According to automotive research company Kelley Blue Book, the average transaction price of new vehicles registered a second consecutive year-over-year increase last month.
However, this did not dampen sales numbers, which, in fact, grew in November. While new vehicle prices were higher, so were the discounts offered by sellers, thus keeping retail sales active.
Meanwhile, S&P projects global new vehicle sales to be at 89.6 million units next year, up from this year’s estimate of 88.2 million. The United States represents nearly 18 percent of the global total.
The forecast takes into account several factors such as tariffs, supply chain issues, interest rates, prices, and energy costs.
“In the U.S., President-elect Donald Trump is expected to hit the ground running in 2025 with a range of policy priorities, including universal tariffs, deregulation, and wavering BEV support,” S&P said.
During his 2024 campaign, the former president said he planned to “end the electric vehicle mandate on day one” once he returned to the White House.
However, Karoline Leavitt, a Trump transition team spokeswoman, said last month that the incoming president “will support the auto industry, allowing space for both gas-powered cars and electric vehicles.”
Used Vehicle Sales
Retail used vehicle sales are estimated to have grown by 2 percent in November from the previous month, according to a Dec. 20 post by automotive services company Cox Automotive.
In total, 1.4 million used vehicles are estimated to have been sold, up by 13 percent from the previous year. Scott Vanner, senior analyst at Cox, said that sales are “running seasonally stronger than we usually see.”
“As consumers shy away from bad weather and the holiday season cuts down on selling days, used sales trends in Q4 generally start to slow down a bit,” he said. “This year, we are seeing stronger-than-usual performance, with sales up by double digits compared to last year.”
The stronger sales numbers come as the average price gap between new and used vehicles surpassed $20,000 in the third quarter for the “first time ever,” according to a report by automotive company Edmunds.
The report said that many people who initially prefer to buy a new vehicle are “likely to end up with a used car unless they adjust their expectations.”
“Used-car shoppers are gravitating toward two major price bands. The most competitive category is the sub-$10K bucket, where vehicles are selling at the fastest rate—on average, these vehicles last one month on a lot before being sold,” it said.
Another sweet spot was found to be the $15,000 to $30,000 range, which accounted for more than 50 percent of used vehicle transactions.