The American auto industry is heading towards one of the most challenging periods in decades, analysts warn.
Ten years ago, the United States set a record of 17.6 million cars sold in a single year, but more and more estimates suggest that this performance may never be matched again, CNBC reports.
According to the consulting company Bain & Company, the U.S. auto market could lose over two million annual sales by 2040, due to a combination of demographic, economic, and technological factors.
Experts describe the situation as a "perfect storm," where declining birth rates, slowing population growth, high prices, and changing consumer behavior overlap.
For decades, the auto industry has relied on an annual growth of about 1%, fueled by population growth. However, this model is starting to change. The fertility rate in the U.S. has dropped to around 1.6 children per woman in 2025, below the population replacement level of 2.1. Although immigration has partially offset this decline so far, Bain estimates that more restrictive immigration policies will significantly reduce population growth rates over the next 15 years.
Young people's habits are changing
At the same time, young people's habits are changing. Today, about half of 16-year-old Americans do not have a driver's license, compared to nearly 70% in the period 1966-1984. Many obtain their license later, but interest in buying a new car is lower than in the past.
Data from S&P Global Mobility shows that the share of new car registrations by individuals aged 18 to 34 dropped from 12% in the first quarter of 2021 to less than 10% by mid-2025. Instead, buyers over 55 now represent almost half of the new car market.
The main reason is the decreasing affordability. According to research company Telemetry, monthly rates for auto loans have increased by about 30% in the past four years, and nearly one in five new cars purchased in the U.S. involves a monthly payment of over $1,000.
Analysts say that many young people already prefer services like Uber or Lyft instead of owning a car, and in the future, the expansion of autonomous robo-taxis could accelerate this trend. If these services become widespread and accessible enough by 2040, millions of American households could give up one of the family cars.
Another factor reducing demand is the increasing lifespan of cars. In 2025, a vehicle on average is in use for 12.8 years, a record for the American market. Cars are more reliable and stay in operation longer, reducing the need for replacement. However, experts warn that it is still unclear how long the batteries of electric vehicles will last and how long manufacturers will continue to provide software updates for modern cars.
AutoForecast Solutions estimates that new car sales in the U.S. will remain around 16 million units annually until 2033, but over the longer term, demographic pressures and market changes could become increasingly visible.