US Automotive Red Report at the End of 2025

JAKARTA - The latest report from Cox Automotive revealed that the volume of car sales in the United States (US) in the fourth quarter fell by 5.4 percent compared to the same period last year, with a total of only 4 million units. Pressure from trade tariffs, the removal of electric vehicle (EV) tax incentives, and the "K-shaped" economy phenomenon (K-shaped economy) are the main factors that hit people's purchasing power, as well as ending the trend of the revival of compact sedans that were seen last year.

The figure of 17 million units, which used to be the gold standard for automotive industry success, now seems to be a memory. Analysts at Cox Auto stated that the figure of 16 million is now a "new peak" for the US market. Although overall 2025 is projected to rise slightly by 1.8 percent to 16.03 million units compared to 2024, experts see this trend not as a spike, but as a new saturation point amid challenging economic conditions.

Mercedes-Benz and Jeep Lead PHEV Market Amid Declining Interest in Pure Electric Cars

As reported by Autoblog, Saturday, December 20, the deepest slump was felt by the electric vehicle (EV) sector, which has been hailed as the future. Sales of EVs in the fourth quarter are projected to fall sharply by 37 percent compared to last year, with the market share shrinking to only 5.7 percent. This decline is very contrasting when compared to the third quarter, where consumers flocked to buy EVs in pursuit of tax credits of up to US $7,500 before the program ended in September.

The electric vehicle market is expected to plummet by 37 percent: Tesla still holds the reins as the EV market leader with a 46 percent share, followed by Chevrolet and Ford. However, Tesla's electrification is not immune from the economic storm; Elon Musk's manufacturer is expected to experience a sales decline of up to 29.8 percent in this closing quarter. On the other hand, "bridge" technology such as hybrid and plug-in hybrid (PHEV) cars continue to show their fangs, with Mercedes-Benz leading the PHEV segment as consumers begin to switch to options that are considered more realistic.

The harsh reality also hit middle-class and working-class communities who are increasingly squeezed by the high cost of vehicle ownership. In addition to the continued soaring new unit prices with an average transaction reaching nearly 50,000 US dollars, insurance costs, spare parts, and maintenance also rose significantly beyond the consumer price index. This condition forces the segment of cheap cars or compact cars to lose their place in the market, making the industry now only rely on premium class consumers who still have purchasing power.

The outlook for 2026 is still difficult to find optimism as Cox Auto predicts sales will fall back to 15.8 million units. Even though sales volumes have shrunk, major automotive manufacturers are predicted to still reap high profits. Their strategy has now shifted pragmatically: selling fewer vehicles but at a much higher price, making new car ownership a luxury that only a few high-end people can enjoy.