Alert: US Forecasts 2.6% Drop in Car Sales in 2026 Due to War and Tariffs

Projection points to 15.8 million vehicles in the US in 2026, with global uncertainties and tariffs pressuring the sector

The US automotive market remains on a path of stability, with Cox Automotive projecting a 2026 closing around 15.8 million vehicles, a 2.6% drop from 2025, when sales reached about 16.2 million.

The beginning of the year showed momentum due to fiscal stimulus, but the outlook remains uncertain. Cox Auto's Chief Economist, Jeremy Robb, uses an image from a Robert Frost poem to illustrate the intersecting options and the path still open before the market.

War in the Middle East and Tariffs Weigh on Consumer Sentiment

With the conflict in the Middle East in focus, and the possibility of disruptions to oil supply through the Strait of Hormuz, consumer confidence tends to recede as the news heats up. Robb emphasizes that the harsher the scenario appears, the lower the disposition of consumers to spend tax refunds.

Tariffs continue to challenge brands: Cox Auto estimates that tariff costs in 2025 totaled US$ 35 billion, with an additional cost of US$ 3,800 per vehicle passed on to buyers. The complex tariff policy remains, with expectations of renegotiation of the USMCA agreement for a trilateral solution between the US, Mexico, and Canada.

Segments on the Rise and EV Growth

The segments registering the largest increases reflect the so-called K-shaped economy, with the wealthiest driving gains and middle and lower incomes lagging behind.

• Mid-size SUVs with growth exceeding 15%
• Mid-size trucks with a gain of about 14%
• Compact luxury SUVs with a 5% increase
• Mid-size cars with gains of a few percentage points

For the first quarter of 2026, Cox Auto estimates the market will be 6.5% smaller than in the first quarter of 2025.

Automakers, EVs, and Incentives

The big three in the American auto sector are expected to continue seeing declines: GM is projected to lose 9.6% compared to Q1 2025; Ford, -9.3%. Stellantis drops 1.9% YoY, with the comparison between Q1 2026 and Q4 2025 indicating a 13.2% drop.

Cadillac and Buick appear among the brands with weaker performance. Toyota North America is expected to drop only 0.1% in the quarter, and Hyundai (including Kia and Genesis) retreats 0.3%, with strong sales of SUVs and Minivans. Nissan drops 7.4% YoY but registers a 17.4% increase compared to the last quarter of 2025.

In the electric sector, EV sales totaled 212,600 units in the first quarter, accounting for about 4.5% of market share and falling 26% compared to the previous year. The EV share peaked at nearly 12% in the third quarter of 2025.

Tesla is estimated at 122,196 units in the first quarter, a 4.6% YoY drop, with the average incentive per electric vehicle for the brand at 11.1%. The highest incentive belongs to Honda, at 27.1%, followed by Kia at 27%, and Porsche at only 2.8%.

The premium for EVs over the total powertrain lineup is around US$ 6,500, and used EVs are getting close to gasoline-powered models. An excess of three-year-old leased EVs is flooding the market, and the leasing index is returning to pre-pandemic levels, near 30%.

About 70% of consumers returning three-year-old EVs end up leasing another electric vehicle, fueled by improvements in battery technology and incentives supporting volume.

Among the names that populate the scene, journalist Todd Lassa is a veteran of automotive journalism. He worked for Detroit newsrooms and now serves as editor-in-chief of an independent news site that has no relation to the automotive universe.

And you — which scenario for 2026 seems most likely? Share in the comments below your reading on how war and tariffs might shape car purchases next year.