If I had a crystal ball to predict the year ahead

Hello! I can't decide if the month of January is crawling by or flying by. Blame the back-and-forth weather chaos we've had here in Wisconsin, switching between single digit temperatures and snowfall to green grass and high 40-degree sunshine. Repeat, repeat, repeat. I can't help but wonder if this is a prediction of how 2026 is going to pan out for our automotive industry? Chaos, less chaos, chaos, less chaos. 

But before looking ahead, let's look back at 2025 now that we have Q4 and full-year sales numbers as reported by several automakers. 

Consumers rushed at the start of the year to buy vehicles of all sorts of powertrains and segments, including one of my best friends, who scrambled to buy a new Hyundai Tuscon Hybrid days before the Trump Administration choked the global economy with trade tariffs. These tariffs several directly affecting not just new vehicles built overseas and imported into the United States, but the parts and components within those vehicles. It was a honestly hot mess, as analyst, trying to figure out what percentage certain tariff was being slapped on to what vehicle or part... coming from what country...effective on this day versus that day. Some vehicles were exempt or minimally impacted, some were given a pass, some were crushed with punishing duties. And I'm only talking about things with wheels and an engine. Everything feels a bit more expensive now.

Then, despite the measurable and proven benefits EVs bring to our country's economy,  like creating jobs for building out charging networks, automakers domestic and abroad investing massive amounts (literally billions of dollars) of cash to build electric vehicles, their batteries, and other bits and pieces here on our shores, especially in red states with politicians who vehemently oppose anything but gas...any and all federal tax incentives toward the purchase or lease of an EV (and PHEVs) ended on September 30. Gone was that $7,500 rebate that many consumers found important, used, and relied on to bring home a new electric vehicle. EV sales soared in the final month or two leading up to October, then stalled. Some states are now offering their own form of a tax credit, like California, America's busiest and best-selling EV market, who just approved a $200 million program in place of the existing federal tax credit.

As a result of this direct blow to EV sales, several automakers canceled plans for upcoming EVs, retreated on lofty exclusively-electric lineup ambitions, or pulled the plug on EVs that were on sale, like Acura did with its ZDX, Nissan with its Ariya, electrified versions of the Genesis G80 and GV70, GM's BrightDrop van, and unfortunately many more. Volkswagen "paused" sales of its ID.Buzz for the 2026, which saddens me, and Ram gave on an entirely-electric 1500 pickup truck.

But! 2025 wasn't all doom and gloom. Many automakers reported big jumps in EV sales, despite no available helpful tax credits available for consumers. Volvo's EV sales rose 96%, Cadillac EV sales jumped almost 70%, VW up 57%, Porsche did well, so did Cadillac and Chevy. Others, like Tesla, Ford, Rivian, Toyota, BMW, Hyundai, Kia, and especially Mercedes-Benz (down 54% YoY) struggled. Remember folks, this slowdown of EV sales is temporary and likely will be for a few short years before sales pickup later this decade. People are still buying EVs and should be because they work for probably the vast majority of American's day-to-day needs and routines.

Anywho, regardless of powertrain, the car sales last year were up. Here's the skinny on 2025 sales by automaker:

📈 MINI 9.3%, Hyundai 8%, Cadillac 8.3%, Buick 8%, Lexus 7.1%, Kia 7%, GMC 6.2%, Ford 6.2%, GM 5.5%, Chevy 4.7%, BMW 4.7%, Lincoln 2%, Jeep 1%, Chrysler 1%, Nissan 0.9%, Acura 0.8%.

📉 Alfa Romeo -36%, Dodge -28%, Audi -16% (boy does this brand need help), Fiat -14%, Volkswagen -13%, Audi -16%, Subaru -3.6%, Ram -2%, Infiniti -0.5%.

Porsche posted its best year ever, but just barely notched past its prior full-year sales record in 2024 of 76,167 units. Over to the posh Swedes, Volvo did see a 2.9% dip in 2025. Mitsubishi, who once sold the cheapest car in America, saw its numbers drop from 109,843 units in 2024 to 94,754 units. Do take note. with the disappearance of the sub-$20,000 Mirage, Mitsubishi's two next most affordable models, the Outlander Sport and Eclipse Cross, saw noticeable sales gains. See the trend?

Personally, I think we're going to see two major trends in 2026 for our automotive industry: more awareness and talk of Chinese brands entering the U.S., and an increased attention to affordability. 

It's no secret that Chinese auto manufacturers are already on the minds of many American consumers. In October, around the time of when the aforementioned $7,500 federal tax credit for EVs went bye-bye, our firm shared some very interesting findings from research we conducted earlier in 2025 on American car buyers' viewpoints on Chinese brands. The biggest take away and perhaps most striking? Year over year, we saw consideration and awareness for Chinese automakers rise by as much as 12%. 65% of those consumers we surveyed in AutoPacific's 2025 Future Attribute Demand Study, told us they were indeed familiar with various Chinese automakers, and 51% said they'd consider buying a vehicle from one of them. Wild. Credit the rise in awareness due to greater coverage of Chinese vehicles on YouTube, popular social media platforms like TikTok and Instagram, as well as a few automotive news websites and blogs that have really ramped up their reporting, like my esteemed colleagues over at InsideEVs. Even more interesting, we dug deeper, and learned that of those consumers who would be open buying a new vehicle from a Chinese brand, regardless of what propels it, the most-considered brands included tech giant Huawei (27%) who does indeed sell cars via Huawei storefronts, Xiaomi (23%), BYD (19%), Great Wall, Geely, and Nio. 

Undoubtedly, 2026 is going to be a big year for China's eventual arrival on our shores because there's already been three major hints and momentum. Geely Auto Group, at CES 2026 in Las Vegas earlier this month, revealed they would be announcing one of its brands will be entering the United States market in the next three years (my money is on Zeekr, which would I think do well here as a hip, fresh, very modern, tech-focused brand aimed at Millennial and Gen Z shoppers). President Trump, earlier this week in Detroit again welcomed the idea of Chinese automakers setting up shop here and selling vehicles to Americans. Finally, the third convincing nugget of proof 2026 will be a big year for Chinese automakers on this side of the globe...today Canada dropped its 100% tariff on Chinese EVs imported into the country down to 6.1% in exchange for China's promise to lower its tariffs on Canadian canola oil. Canada plans to allow up to 49,000 Chinese EVs into the country initially, with that number growing to 70,000 vehicles by the end of the decade. With EV penetration already underway south of us (Mexico and Latin America) and now to the north of us, it's only a matter of time before we cave and let them in too. Consequently, we'll probably begin to see more of these Chinese EVs hopping across the border into the U.S., boosting awareness and fueling curiosity amongst consumers.

Now before I wrap up, I want to chat about affordability, which I think will be the other major trend for 2026. While whole industry-wide average transaction prices (ATPs) on new vehicles is north of $50,000...my friend and esteemed colleague Dave Thomas over at CDK Global took a different approach to this metric and, brilliantly, instead pooled over pricing for the 14 best-selling cars and trucks in the U.S. market that collectively makeup 26% of total sales. CDK's Affordability Tracker report found that in December 2025 the ATP for the "average" car, crossover SUV, and one pickup truck, Toyota's popular Tacoma (note the emphasis on "average" being the most common best-selling vehicles sold rather than lumping in six-figure exotics, luxury cars, and other abnormalities) was $35,599. ATP for the "average" truck (this includes your best-selling light-duty pickups like the F-150, Silverado, etc.) clocked in at $56,136. Like myself, Dave expects these ATPs to rise.

So obviously, automakers need to act and keep affordability in check. We saw that happen last year with the introduction and re-introducion of base entry-level trims on popular vehicles, through de-contenting (Tesla loosely attempted to do so with new Standard trims of its Model 3 and Model Y), as well as new or redesigned entrants to the industry with appealing MSRPs more in reach with budget-minded consumers (like Chevrolet pricing its new 2027 Bolt EV well below $30,000 and Nissan giving its value-packed Sentra sedan an impressive makeover without much of a price increase). I think we'll continue to see this happen into 2026 as consumers woes over inflation linger.

Lots to buckle up for and see unfold in the next twelve months.

Have a grand weekend.

~Robby

➡️ What I'm listening to: "Skyline" by Nitewind
➡️ What I'm drinking: Central Waters Brewing Company's Mudpuppy Porter
➡️ An auction I'm watching: https://carsandbids.com/auctions/r461POdp/1995-acura-nsx-t
➡️ A story you should peep: https://www.motor1.com/news/780500/byd-boxer-engine/
📰 Where I'm quoted:I shared my predictions with Business Insider about Tesla's plans for 2026 and beyond.