U.S. new-car sales rose about 2% in 2025, reaching roughly 16 million vehicles, despite a year marked by supply-chain disruptions, tariffs, and the removal of the $7,500 EV tax credit.

Gas-powered trucks, SUVs, and hybrids drove most of the demand, while electric-vehicle sales fell sharply to 6.6% of retail sales, down from 11.2% in 2024, as automakers scaled back EV production and canceled major programs.

Average transaction prices rose modestly, but affordability remains a barrier for many buyers. Analysts caution that sustaining growth in 2026 may be difficult due to economic uncertainty, tariffs, and reduced EV incentives, though lower interest rates and maturing leases could help stabilize the market.

Major automakers, including GM and Ford, reported significant financial adjustments tied to changing EV strategies, reflecting broader market volatility.

The industry faces ongoing pressure from regulatory shifts, consumer pricing sensitivity, and the post-pandemic shakeout in vehicle demand.