Quick Facts
What Happened
The U.S. automotive industry is heading for a challenging 2026, with new car sales projected to reach 15.8 million units—a 2.6% decrease from last year, according to Cox Automotive's latest forecast released this week. The downturn is attributed to higher vehicle prices, elevated interest rates, and the recent elimination of EV tax credits.
Cox Automotive analysts anticipate light vehicle deliveries will fall 9.7% from Q4 2025 (4 million units) to Q1 2026 (3.7 million), representing a 6.5% drop compared with Q1 2025, when automakers sold 3.9 million units. Every major automaker, except Mercedes-Benz, is expected to post year-over-year sales declines in the first quarter.
General Motors is projected to maintain its position as the No.1 automaker in Q1 U.S. sales with more than 624,000 vehicles, though that figure represents approximately a 10% decrease due to relatively weak performance from Cadillac and Buick brands. GM's market share is expected to decline 0.6 points to 17.0%.
Toyota is rapidly closing the gap, boosted by strong Tacoma and 4Runner sales. The Japanese automaker is expected to gain 1.0 point of market share, reaching 15.5% of U.S. sales. If current trajectories continue, Toyota could outsell GM in the U.S. for only the second time ever in 2027—the first occurrence since 2021, when the COVID-19 pandemic disrupted global supply chains.
The battle for third place intensifies between Ford and Hyundai. Cox projects Ford's Q1 sales falling to approximately 452,000 units, translating to 12.3% market share (a 0.4 point drop). Meanwhile, Hyundai is projected to have sold more than 418,000 vehicles in the first quarter, capturing 11.4% market share—a gain of 0.7 points.
Electrified vehicles achieved a record-high 26% of the U.S. market, powered primarily by hybrid-electric growth. Traditional hybrids are well-positioned to remain the primary driver of electrified expansion in 2026, as affordability, ease of ownership, and diverse model options continue resonating with mainstream buyers. Toyota dominates this segment, accounting for approximately 43% of HEV sales, followed by Honda, Ford, Hyundai, and Kia.
Notably, U.S. sales of vehicles powered solely by internal-combustion engines declined from 85% in early 2023 to 74.3% at the close of 2025. However, combining hybrids, plug-in hybrids, and ICE vehicles means approximately 94% of the U.S. vehicle market remains gasoline-powered. The 5.9% share for pure EVs reflects a sharp fourth-quarter sales drop following the September 30 termination of EV tax credits.
Volkswagen and Subaru face particularly challenging quarters. VW sales are expected to plummet nearly 20%, resulting in a 0.6% market share loss, with anticipated declines exceeding 30% for the Jetta and Taos models. Among Subaru's five largest nameplates, only the Forester is showing gains this year.
Nissan stands out with projected Q1 sales rising 17% over Q4, driven by robust Rogue and Pathfinder activity. Stellantis sales declined only 1.9%, significantly better than the national average, supported by strong Ram pickup and ProMaster van performance.