U.S. auto sales are projected to decline in the first quarter of 2026, as affordability pressures and economic uncertainty dampen consumer demand.
Industry data from Cox Automotive points to a 6.5% year-over-year drop, with full-year sales expected to decrease by 2.6%.
Elevated borrowing costs and vehicle prices, combined with the loss of EV tax incentives, are slowing purchasing activity across the market.
Electric vehicle sales are forecast to fall sharply, dropping nearly 28% after a surge driven by expiring federal incentives last year.
Despite rising fuel costs, analysts warn that persistently high vehicle prices may limit broader EV adoption and curb overall demand.
Market interest in EVs remains resilient, reaching its highest level so far in 2026, though similar peaks have been observed previously.
Among automakers, General Motors is expected to lead sales despite a projected 10% decline, while Toyota may gain market share.
Meanwhile, rising dealership inventories are intensifying competition, potentially leading to better deals and increased discounts for buyers.
