New car sales

In 2025, new car sales in the United States are set to reach an estimated 16.2 million units. The market experienced four consecutive months of year-over-year gains leading up to early 2025. However, several challenges have tempered growth, including ongoing economic uncertainty, seasonal sales slowdowns, and the elevated transaction cost of new vehicles, which approached $48,000 in 2024.

Between 2020 and 2025, new car sales in the U.S. fluctuated in response to macroeconomic and market-specific disruptions. In 2020, sales declined significantly due to the COVID-19 pandemic, falling to 14.5 million units. The recovery was uneven, with sales rebounding by 3.3% in 2021 to 15.0 million units, then contracting by 8.0% in 2022 amid persistent supply chain challenges, notably a global semiconductor shortage that limited vehicle production and inventory. By 2023, sales climbed 12.7% to 15.5 million units as supply constraints began to ease and pent-up demand was partially satisfied. Growth continued into 2024 and the first half of 2025, but at a slower pace, with sales increasing by 1.9% and 2.3% respectively. The average age of vehicles on the road increased from 11.4 years in 2014 to 12.6 years in 2024 as higher vehicle prices and elevated interest rates on car loans curtailed new purchases, extending vehicle lifespans.

Key macro trends during this period included strong adoption of electrified vehicle options. Automakers expanded hybrid and electric vehicle (EV) offerings, responding to consumer interest in lower emissions and enhanced fuel economy. While EV adoption increased, hybrids gained greater traction, especially for buyers not ready to transition fully to electric vehicles due to charging infrastructure limitations. Rising transaction costs, ongoing inflationary pressures, and tightening credit standards in the wake of the pandemic also influenced both consumer demand and automaker strategies.

From 2020 to 2025, the U.S. new car market demonstrated resilient growth despite facing economic headwinds, supply bottlenecks, and changing consumer preferences. Market growth was supported by a post-pandemic recovery in credit availability and gradual normalization of supply chains, while high vehicle prices and macroeconomic uncertainty limited more robust expansion. Automakers' shift toward hybrid and EV models highlighted a significant transformation in response to evolving market and regulatory trends.