As we approach 2025, S&P Global Mobility predicts that global new vehicle sales will reach 89.6 million units, indicating cautious growth in the automotive market. However, forecasts for 2025 have been revised downward due to anticipated changes in U.S. policies following the election. These changes are expected to significantly impact vehicle demand, particularly in areas like interest rates, trade flows, sourcing, and the adoption of battery electric vehicles (BEVs).
S&P Global Mobility estimates a 1.7% year-over-year increase in global vehicle sales, reaching 89.6 million units in 2025. The automotive industry is focusing on managing production and inventory to align with regional demand, which is slowing in key markets, partly due to a slower adoption rate of electric vehicles.
The outlook for 2025 takes into account improved supply, the impact of tariffs, high interest rates, affordability issues, high vehicle prices, mixed consumer confidence, energy price and supply concerns, risks in auto lending, and the challenges of electrification. In the U.S., President-elect Donald Trump is expected to implement policies such as universal tariffs, deregulation, and reduced support for BEVs.
Colin Couchman, Executive Director of Global Light Vehicle Forecasting at S&P Global Mobility, stated, “2025 poses significant challenges for the auto industry as regional demand factors limit growth potential, and the new U.S. administration introduces uncertainty from the start.”
For 2024, global vehicle sales are projected to reach 88.2 million units, a 1.7% increase from 2023, supported by the stabilization of supply chains and restocking of inventories.
Market-by-Market Vehicle Sales Forecasts
Europe
By the end of 2024, the Western/Central European market is expected to reach just under 15 million units, a 1.1% year-over-year increase. However, in 2025, the market is forecasted to remain flat at around 15 million units, reflecting potential economic recession risks, high car prices, reduced EV subsidies, EV tariffs, and political uncertainties in Germany and France.
Couchman noted, “Key challenges include electrification, EU tariffs on Chinese imports, Trump tariff risks, hesitant consumers, a new EU Commission, and lobbying on EU emission targets.”
United States
S&P Global Mobility projects U.S. sales to reach 16.2 million units in 2025, a 1.2% increase from 2024. The environment for auto sales remains uncertain due to new administration policies.
Chris Hopson, Manager of North American Light Vehicle Sales Forecasting, stated, “2025 presents mixed opportunities and uncertainty for the auto industry. Vehicle pricing is expected to decrease but remain high, and interest rates may drop while inflation stays persistent.”
Mainland China
For 2024, China is expected to recover with sales reaching at least 25.8 million units, a 1.4% increase. In 2025, despite economic challenges, demand is forecasted to rise to 26.6 million units, a further 3.0% increase, driven by incentives and government support.
The NEV boom is set to continue, with electrified vehicle prices benefiting from lower battery costs and subsidy programs. NEV penetration is projected to increase to 58% in 2025, up from 49% in 2024.
Japan
In 2025, Japan’s light vehicle demand is expected to grow following a disappointing 2024. Sales are projected to reach 4.6 million units, a 5.4% increase from 2024. However, the prospect of U.S. tariffs and weaker global economic conditions could pose challenges for Japan’s export-driven auto industry.
2025 Vehicle Production Outlook Stagnates as Global Risks Intensify
Global light vehicle production is forecasted to decline by 0.4% in 2025, reaching 88.7 million units. The incoming U.S. administration is expected to impose new tariffs, which will impact production levels across regions.
Mark Fulthorpe, Executive Director of Global Light Vehicle Forecasting, commented, “The auto industry faces uncertain conditions in 2025, with anticipated universal tariffs from President-elect Trump likely to alter the production landscape.”
In China, production is expected to remain stable at 29.6 million units, supported by strong NEV demand and exports, though tempered by EU import tariffs on Chinese BEVs.
North American production is set to decrease by 2.4% to 15.1 million units, influenced by new tariffs and policy changes.
European production is projected to decline by 2.6%, reaching 16.6 million units, as the market adjusts to new emission rules and tariff/trade policies.
Consumer Uncertainty Around Electrification
Automakers are reassessing their electrification plans, considering government policy adjustments, especially concerning incentives, subsidies, industrial policy, and tariffs. Outside China, automakers face challenges in scaling BEV production and attracting buyers.
Despite challenges, electric vehicles remain a growth sector. S&P Global Mobility predicts global BEV sales to increase by 30% to 15.1 million units in 2025, accounting for 16.7% of global light vehicle sales.
Looking beyond 2025, uncertainties persist regarding electrification, including charging infrastructure, battery supply chains, and policy support essential for transitioning from fossil fuels to electric alternatives.
China’s NEV program and Europe’s “Fit for 55” initiative continue to support sustainable mobility, but President-elect Trump’s intentions for U.S. EV support remain unclear.
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