Auto sales are on track for a robust close to 2024, with December sales projected to hit 1.45 million units, according to S&P Global Mobility. This marks a seasonally adjusted annual rate (SAAR) of 16.5 million units, consistent with November figures and reflecting a fourth-quarter average of 16.4 million units — the highest quarterly pace since the second quarter of 2021.
The automotive market, however, faces a turbulent outlook heading into 2025. S&P Global Mobility forecasts a slight increase in U.S. sales volume to 16.18 million units in 2025, up 1.2% from the projected 2024 total of 16.0 million units. Factors such as elevated vehicle prices, persistently high inflation and shifting interest rates are expected to constrain demand.
“2025 brings with it mixed opportunities and uncertainty for the auto industry as a new administration and policy proposals take hold,” said Chris Hopson, manager of North American light vehicle sales forecasting for S&P Global Mobility.
While vehicle pricing is expected to decline, it will remain high compared to historical norms. Interest rates are anticipated to trend downward, but inflation is projected to stay sticky, creating additional challenges for affordability.
Hopson noted, “New vehicle affordability issues that coalesced to constrain auto demand levels for much of 2024 will not be resolved quickly in 2025.”
Despite these challenges, electric vehicles continue to gain market share. Battery electric vehicle (BEV) sales have exceeded an 8% share of monthly sales since June, with September reaching 8.6% and October maintaining a similar level. December’s BEV share is projected to surpass 9.0%, partly driven by consumer anticipation of the expiration of federal EV incentives in 2025.
While the automotive industry’s short-term outlook appears stable, S&P Global Mobility highlights the need for careful inventory and pricing strategies as consumer unease persists. The coming year is expected to test manufacturers’ ability to navigate evolving economic and regulatory landscapes.
