Cox Automotive Predicts Strong 2025 Growth with 25% Electric Vehicle Sales

Cox Automotive forecasts 16.3 million new vehicle sales in 2025, with a quarter of all sales being electrified vehicles, marking the industry's strongest performance since pre-pandemic levels.

Published Sat, 11 Jan 2025 00:00:00 GMT

#CoxAutomotive#MarketForecast#AutoIndustry#EVs#ElectricVehicles#AutoSales#ConsumerTrends#MarketGrowth#AutoFinance#DealerInsights

Artistic graphic depicting eletric vehicles in a city scape

Cox Automotive has released an optimistic forecast for the automotive industry in 2025, predicting significant growth driven by electric vehicle (EV) sales and overall market recovery. The report highlights a robust outlook, with expectations for the best performance since before the pandemic.

Key Takeaways

  • Market Growth: Projected sales of 16.3 million new vehicles in 2025, a 2.6% increase from previous years.
  • Electric Vehicles: 25% of vehicles sold in 2025 will be electrified, with 10% fully electric and 15% hybrids or plug-in hybrids.
  • Consumer Confidence: Rising satisfaction among buyers, with 75% reporting high levels of contentment with their purchases.

Market Overview

Cox Automotive’s report indicates that the U.S. automotive market is on a solid path forward, with 2024 ending on a high note. The company anticipates that 2025 will be the best year for the auto market since 2019, with new vehicle sales expected to reach 16.3 million units. This marks a 3% increase compared to previous years, reflecting a strong recovery from the pandemic’s impact.

Electric Vehicle Projections

The report emphasizes the growing importance of electric vehicles in the market. Key projections include:

  • EV Sales Growth: Approximately 10% of total vehicle sales will be fully electric, up from 7.5% in 2024.
  • Hybrid and Plug-In Vehicles: Expected to account for 15% of sales, contributing to the overall electrification trend.
  • Internal Combustion Engine (ICE) Vehicles: Sales of ICE vehicles are projected to decline to 75% of total volume, the lowest level on record.

This shift towards electrification is supported by the introduction of around 15 new EV models, an expanding charging infrastructure, and state-level incentives that encourage consumers to make the switch.

Economic Factors Supporting Growth

Several economic factors are contributing to the positive outlook for the automotive industry:

  1. Stabilizing Interest Rates: Interest rates are expected to decline, making auto loans more affordable.
  2. Increased Credit Approval Rates: More consumers will have access to financing options.
  3. Rising Inventory Volumes: An increase in vehicle inventory will lead to more competitive pricing and incentives for buyers.

Cox Automotive’s Chief Economist, Jonathan Smoke, describes the current economic climate as a “Goldilocks economy”—not too hot, not too cold—fostering positive consumer sentiment and dealer confidence.

Consumer Sentiment and Satisfaction

Consumer satisfaction is on the rise, with 75% of buyers expressing high levels of contentment with their vehicle purchases. This increase in satisfaction is attributed to dealers’ ability to balance technology with exceptional in-showroom experiences, creating a positive buying environment.

Conclusion

As the automotive industry gears up for 2025, the combination of robust consumer demand, improving affordability, and a strong economic backdrop suggests another year of progress for dealers and manufacturers alike. With the anticipated surge in electric vehicle sales and overall market growth, Cox Automotive’s forecast paints a promising picture for the future of the auto industry.

Sources