Despite the mess 2025 has been, it’s slated to be a six-year high point for new-vehicle sales. Don’t expect the same thing in 2026. Analysts expect sales to decline for the first time since 2022 as the industry deals with issues surrounding affordability, import tarrifs and an uncertain future for electric vehicle demand. We also can’t forget that there’s a lot more potential for automakers to pass more tariff costs onto customers.
Right now, forecasts range from 15.8 million sales at Cox Automotive to 16.1 million at GlobalData, and Edmunds is in the middle at 16 million. No matter how you slice it, those numbers are below the 16.2-16.3 million vehicles that’ll end up shipping in the U.S. this year. From Automotive News:
The tariffs that President Donald Trump began imposing last spring and his administration’s decision to cancel the federal $7,500 EV tax credit after September have been cited for pushing some consumers to buy a new vehicle sooner than they might have otherwise. That dynamic resulted in weaker sales late in the year.
“All through the third quarter, sales were strong, led by a surge in EV activity,” said Charlie Chesbrough, senior economist at Cox Automotive. “But since the tax credits expired at the end of September, the sales pace has slowed, and that trend is expected to continue through the end of the year.”
Cox pegged the fourth-quarter sales pace at 15.6 million vehicles, down from 16.4 million in the third quarter.
If sales are indeed down in 2026, the collapse of the electric vehicle market and tariffs will share a lot of the blame, which means a lot of the blame will be at the feet of — you guessed it — President Donald Trump.
Early data shows that about 230,000 EVs were sold in the fourth quarter, down 46 percent from the previous quarter and 37 percent from a year earlier, said Stephanie Valdez Streaty, Cox’s director of industry insights. She said Cox projects full-year EV sales to be 2.1 percent lower.
“Despite Q3’s record performance, the sharp Q4 pullback resulted in an overall year-over-year decline” in EV sales, she said.
EVs likely will have a tough road in 2026, particularly early in the year, said David Oakley, GlobalData’s manager of vehicle sales forecasts for the Americas.
There still will be interest in EVs, including from consumers looking for another one after their lease ends, said Jessica Caldwell, head of insights at Edmunds. But sales are expected to be softer without the tax credit, because EVs will attract fewer casual buyers through attractive lease deals in 2026.
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Analysts say tariffs have not raised vehicle prices as much as once anticipated, though prices remain elevated. The Federal Reserve cut interest rates three times in late 2025, and more lease returns are expected to flow into the used market, giving buyers a larger selection of nearly new vehicles.
But affordability remains a challenge. Some analysts described a “K-shaped” market, with higher-income buyers driving new-vehicle sales while less-affluent shoppers have to stretch their budgets to afford a new car or stay out of the market.
I don’t have a crystal ball, so I cannot say for certain how 2026 will turn out, but it’s not looking too hot right now. The simple fact is that if people cannot afford new cars, they’re not going to buy them.
