US Auto Sales Expected To Have Banner Year in 2025: Will EVs Gain Ground?

A long-beleaguered American auto market may be seeing signs of a turnaround in 2025, at least if industry experts are to be believed.

According to a recent CNBC report, three key players in the space — Edmunds, S&P Global Mobility, and Cox Automotive — all project significant gains in terms of U.S. auto sales in 2025. While S&P Global and Edmunds predict new light-duty vehicle sales of 16.2 million units next year, Cox is a bit more optimistic, projecting 16.3 million sales.

As CNBC underscored, if these figures materialize, they would be the highest since 2019, a year in which 17 million vehicles were sold in the United States.

Auto Sales 2025: Trump Bump or Tariff Troubles?

Speculation abounds as to whether the strong closeout in auto sales for 2024 in the post-election period and the projected rebound of the auto market in 2025 are direct results of a so-called Trump bump, as Autoweek outlined.

Overall, General Motors performed the best in terms of Q4 year-over-year sales, with a projected hike of 18.5%, while Honda came in second place with an improvement of 5.9%.

While economic enthusiasm over the election results may have spurred some buyers into the market, incoming President Donald Trump has also threatened to enact significant tariffs on American trading partners Canada and Mexico. If enacted, these tariffs could represent a "radical disruption" to the U.S. auto market, according to Cox Automotive’s chief economist, Jonathan Smoke.

"We know that there are twists that could be coming with policy shifts, but some key assumptions that we’re making are that most of those shifts are likely to take time, and ahead of when they’re implemented, will actually likely drive demand to be pulled forward,” Smoke said during a virtual briefing on Dec. 17, per CNBC. He remained wary of drawing any conclusions as to whether tariffs would actually be implemented, however.

“As it relates to tariffs, specifically, we are not making any assumptions that major new tariffs will be implemented," he continued.

EV Auto Sales Next Year Could Break Records

Despite the very real possibility that Trump could cancel the federal electric vehicle (EV) consumer tax credits (valued at up to $7,500), it looks as if EVs are set to have a banner year in 2025.

A significant 1.3 million EVs have been or will be sold in the U.S. in 2024, according to Cox projections, and Cox anticipates that 25% of new auto sales in 2025 will be electrified — meaning either full EVs or hybrid models.

Within that bracket, Tesla is finding competitors nipping at its heels. An aging product lineup — excluding the latest Cybertruck — and a growing field of hungry automakers looking for a share of the growing EV market have changed dynamics in the space.

"The top three manufacturers are Tesla, Hyundai Motor Group and General Motors, with GM having the largest increase in market share year over year at 2.7% at the brand level. Even though Tesla’s market share has declined below 50%, the Model Y and Model 3 continue to hold the top two spots,” Stephanie Valdez Streaty, Cox director of industry insights, said.

“Various other models are collectively taking away share from Tesla," she continued.

Buying Now Might Not Be Such a Bad Move

According to Edmunds, those who are in the market for a new car should probably consider doing so sooner, rather than later. Edmunds' director of insights, Ivan Drury, made the case for picking up a new ride before policy changes take effect under a new administration — particularly if you're interested in an electric vehicle.

"It's impossible to predict which policy changes might be implemented starting in January, but if you know you're going to need a new vehicle in 2025 and prefer to hedge your bets, it wouldn't hurt to start shopping now," said Drury. "In particular, if you're in the market for an EV, acting within the next month is probably a smart move."