As 2025 approaches, S&P Global Mobility forecasts 89.6
million new vehicle sales worldwide next year, reflecting cautious
recovery growth. 2025 automotive forecasts have been downgraded
across the board, reflecting expected post-election US policy
shifts. Resulting impacts to vehicle demand will be significant,
especially interest rates, trade flows, sourcing, and BEV adoption
rates.
Global new vehicle sales in 2025 are expected to rise 1.7%
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 US,
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 US 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.”
2024 global vehicle sales are expected to reach 88.2 million
units, according to S&P Global Mobility. This reflects a 1.7%
increase from 2023, supported by ongoing inventory restocking
throughout the year as supply chains become more stable.
Market-by-market vehicle sales forecasts
Europe: Wrapping up 2024, the Western/Central
European market should deliver just under 15.0 million units (+1.1%
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% 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% 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.
The NEV boom is likely to extend into 2025 with electrified
vehicle prices benefitting from cheaper battery costs together with
generous national and regional subsidy programs to help stimulate
new vehicle demand. Coupled with full NEV tax exemption through to
the end of 2025, NEV penetration (as % of passenger vehicles) is
projected to further increase to 58% in 2025, from 49% in 2024,
according to S&P Global Mobility estimates.
Japan: Looking to 2025, Japanese light vehicle
demand should be back in growth mode following a disappointing
2024, largely reflecting Daihatsu's unexpected halt in shipments
due to emissions irregularities. S&P Global Mobility projects
sales volumes to reach 4.6 million units in 2025, an estimated
increase of 5.4% from the projected 2024 level below 4.4 million
units. The prospect of US universal tariffs, and weaker global
economic fundamentals, could prove problematic for Japan—a key
net exporter of automobiles, especially to North America, although
expected slower US BEV growth could offer a silver lining.
2025 vehicle 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% 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 US administration will levy a new wide-reaching
tariff regime, effectively creating a universal tariff of 10% on
all goods coming into the US 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.”
In mainland China, S&P Global Mobility forecasts stable
production levels for 2025, up 0.1%, at 29.6 million units. Output
levels should be supported by a combination of heady NEV domestic
demand, alongside robust exports, albeit tempered by EU import
tariffs on Chinese-made BEVs.
For the North American region, overall 2025 production is set to
fall back by 2.4%, to 15.1 million units. The incoming Trump
administration will mark a return to the predictably unpredictable
with policies that are expected to influence overall demand and
challenge vehicle mix assumptions. On a brighter note, deregulation
should create tailwinds for the North American auto industry later
in President Trump's second term.
Europe is expected to build 16.6 million units in 2025, down
2.6% from an estimated 17.0 million in 2024. The outlook reflects
propulsion mix fine tuning ready for the 2025 step change in EU
emissions rules, alongside new tariff/trade assumptions associated
with the incoming Trump administration, with premium vehicles
particularly at risk.
Consumer uncertainty around electrification, especially
speed bumps in Europe & US
Through 2024, a host of OEMs have been walking back ambitious
electrification plans for the coming five to 15 years. A key
concern is how “natural” EV demand fares, as governments fine-tune
policy support, especially incentives and subsidies, EV industrial
policy, and tariffs. Outside China, automakers face twin challenges
in the electrification transition—scaling output of sellable
BEVs and finding willing customers to buy them.
Despite the gloom, electric vehicles remain an important
automotive growth sector, and S&P Global Mobility projects
global sales for battery electric passenger vehicles to post 15.1
million units for 2025, up by 30% compared to 2024 levels,
accounting for an estimated 16.7% of global light vehicle sales.
For reference, 2024 posted an estimated 11.6 million BEVs globally,
for 13.2% market share.
Major markets are forecast for most of this volume, though
smaller markets will also see modest increases. Forecasted BEV
share by region is as follows:
Looking beyond 2025, many uncertainties persist regarding the
pace of electrification, especially regarding charging
infrastructure, grid power, battery supply chains, global sourcing
trends, tariff trade barriers, the rate of technological
advancements, and the necessary level of support from policymakers
to facilitate the shift from fossil fuels to electric
alternatives.
Currently, China's NEV program and Europe's “Fit for 55”
initiative remain intact to support a sustainable mobility future.
Less clear are President-elect Trump's intentions for US electric
vehicle support, especially regarding the IRA and various policy
initiatives.
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