By Moses Akaigwe
Global new light vehicle sales in 2025 are expected to rise 1.7 percent year-over-year, to 89.6 million units, according to a new forecast by S&P Global Mobility.
The global auto sector remains focused on managing production and inventory levels in response to regional demand patterns, which include slower growth in key markets, in some cases related to slower electric vehicle adoption rates.
The forecast outlook incorporates several factors, including improved supply, tariff impacts, still-high interest rates, affordability challenges, elevated new vehicle prices, uneven 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 hit the ground running in 2025 with a range of policy priorities, including universal tariffs, deregulation, and wavering BEV support.
“2025 is shaping up to be ultra-challenging for the auto industry, as key regional demand factors limit demand potential and the new U.S. administration adds fresh uncertainty from day one,” said Colin Couchman, executive director of global light vehicle forecasting for S&P Global Mobility. “ A key concern is how “natural” EV demand fares as governments rethink policy support, especially incentives and subsidies, industrial policy, tariffs, and fast evolving OEM target setting.”
Global light vehicle sales for the full year 2024 are expected to reach 88.2 million units, according to S&P Global Mobility. This reflects a 1.7 percent increase from 2023, supported by ongoing inventory restocking throughout the year as supply chains become more stable.
Market-by-market forecasts
Europe: Wrapping up 2024, the Western/Central European market should deliver just under 15.0 million units (+1.1 percent y/y), as customers remain cautious, and OEMs continue to fine-tune their propulsion mix. Into 2025, this storyline will intensify as strict 2025 emission rules further influence the market mix and topline, S&P Global Mobility forecasts the market flatlining around 15 million units, up by just 0.1 pervent y/y – reflecting economic recession risks, still-high car prices, tapering EV subsidies, EV tariffs, and political uncertainty in Germany and France.
“Key challenges include the dynamic electrification storyline, alongside EU tariffs on mainland Chinese imports, Trump tariff risks, hesitant consumers, a new EU Commission, and vigorous lobbying regarding EU emission targets,” Couchman said.
United States: S&P Global Mobility projects US sales volumes to reach 16.2 million units in 2025, an estimated increase of 1.2 percent from the projected 2024 level of 16.0 million units and reflective of a still uncertain environment for auto sales levels.
“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. “New vehicle affordability issues that coalesced to constrain auto demand levels for much of 2024 will not be resolved quickly in 2025. Vehicle pricing levels are expected to decline but remain high; interest rates are expected to shift further downwards, but inflation levels are anticipated to remain sticky, and new vehicle inventory should also progress, but careful management is expected too. Combined with an uneasy consumer, we project this translates to mild growth prospects for auto sales.”
Mainland China: For the year ending, the combination of the CNY130 billion extension of New Energy Vehicle (NEV) incentives, together with the new CNY75 billion trade-in scheme, 2024 is estimated to recover to at least 25.8 million units (+1.4% y/y), according to S&P Global Mobility. For 2025, despite below par economic activity, the automotive sector will continue to be supported by the NEV and trade-in schemes, along with local government auto incentives, wider government stimulus, and the continuation of the vehicle price wars. 2025 demand for Mainland China is forecasted at 26.6 million units, up a further 3.0% over 2024 levels.
2025 production outlook stagnates as global risks intensify
Global light vehicle production in 2024 is expected to finish at 89.1 million units – a 1.6 pervent deterioration compared to 2023 levels, with all regions except mainland China and South America experiencing decline.
The production outlook for 2025 is dominated by the assumption that the incoming U.S. administration will levy a new wide-reaching tariff regime, effectively creating a universal tariff of 10% on all goods coming into the U.S. except for Canada and Mexico where the terms of the USMCA are assumed and mainland China where it is assumed a tariff of 30% will be applied.
For 2025, S&P Global Mobility forecasts global light vehicle production levels to decline by 0.4%, to 88.7 million units. The tariff effects are difficult to isolate in each region especially considering the ongoing challenges of inventory management, and with continued volatility at the vehicle program level as OEMs make strategic adjustments to their future product plans.
“The auto industry continues to navigate uncertain terrain as we enter 2025, particularly as we anticipate President-elect Trump’s incoming universal tariffs,” said Mark Fulthorpe, executive director of global light vehicle forecasting for S&P Global Mobility. “During 2025, the production landscape will change dramatically, as global trade slows, and as retaliatory measures are likely to emerge.”