The U.S. auto industry has shown remarkable resilience in 2024, continuing its rebound after experiencing a decade-low in 2022. With replenished inventories, rising hybrid demand, and strategic promotional incentives, most automakers closed 2024 on a high note.
New car sales in the United States increased to 15.9 million units in 2024, marking 2.2% year-over-year growth, according to Wards Intelligence. This five-year high was buoyed by robust holiday sales, which spiked 6% in December, and an impressive performance in the fourth quarter. The industry benefited from stronger inventories, deeper discounts, and a preemptive rush in EV purchases following Donald Trump's election victory, as buyers sought to leverage expiring tax credits.
A Glance Through the Sales Numbers
General Motors GM retained its crown as the top-selling U.S. automaker in 2024, followed by Toyota, Ford, Hyundai-Kia, Honda, and Stellantis. GM sold 2.7 million vehicles in 2024, a 4.3% increase year over year, with all four key brands—Chevrolet, GMC, Buick, and Cadillac—posting solid gains. Chevrolet sales rose 1.5% to their highest since 2019. GMC enjoyed its best year ever, with a 9% increase, driven by a 33% spike in the fourth quarter. Cadillac had its strongest full-year and quarterly sales since 2016, while Buick sales surged 10%, reaching their best total since 2021.
Japanese auto giant Toyota TM, the second-best seller, reported a 3.7% year-over-year increase to 2.3 million vehicles. This growth was supported by the popularity of reliable models like the Camry and RAV4, as well as significant gains in hybrid sales.
Ford F — GM’s rival — secured third place, with 2024 sales of 2.08 million vehicles, up from just under 2 million in 2023. Its fourth-quarter sales rose 8.8% year over year, reaching 530,660 vehicles.
Hyundai-Kia was fourth, overtaking TM’s closest peer, Honda HMC, with a combined 1.65 million units sold. Hyundai’s sales rose 4% to a record 836,800 vehicles, while Kia delivered 796,488 units, marking its second consecutive year of record sales.
Honda saw an 8.8% increase in 2024 sales, totaling 1.42 million vehicles, with December sales rising 9.9%.
Italian-American automaker Stellantis STLA faced a challenging year, with U.S. sales dropping 15% to 1.3 million units. Popular brands like Jeep, Ram, and Dodge suffered declines. Fourth-quarter sales fell 7%.
While STLA and TM carry a Zacks Rank #5 (Strong Sell) each, F and HMC have a Zacks Rank #4 (Sell) and a Zacks Rank #3 (Hold), respectively. GM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hybrids and EVs Take Center Stage
One of the standout trends of 2024 was the meteoric rise in hybrid and electrified vehicle sales. Hybrid sales soared 36.7% in the United States (per Wards Intelligence), while EV sales notched a new record of 1.3 million units last year.
Toyota’s hybrid and EV sales topped 1 million units (up 53% year over year) for the first time, accounting for 43% of its total U.S. sales. Toyota appears to be moving toward converting its entire lineup to hybrid-only models. Honda’s hybrid and EV sales also grew 19% to approximately 349,000 units.
Ford is also riding the hybrid wave. In the December quarter, its hybrid sales surged 26.5%, outpacing the 16.3% growth in EV sales and the 6.8% increase in traditional internal combustion engine (ICE) vehicles. For the full year, Ford sold nearly double the number of hybrids compared to EVs, delivering 187,426 hybrids versus 97,865 battery electric vehicles. Overall, Ford's total EV sales (including hybrids) rose 38% year over year to a record 285,291 units, highlighting the growing appeal of hybrid vehicles in the market.
Hybrids dominated over pure EVs, underscoring the consumer preference for hybrids as a transitional technology, blending better fuel efficiency with fewer range and infrastructure limitations compared to EVs.
U.S. EV sales were up 12% from the previous year. However, the growth slowed compared to earlier years, reflecting waning demand and increasing competition. Tesla, in particular, faced challenges, with its sales declining due to an aging lineup and fierce competition in key markets like China.
2025 Outlook: Cautious Optimism
Looking ahead, the U.S. auto market is poised for further growth in 2025, with new-car sales projected to reach 16.3 million units, a 3% increase from 2024, according to Cox Automotive. That would mark the third straight year of annual growth in U.S. new vehicle sales. Improving affordability, coupled with a healthier economy, is expected to drive demand.
Policy changes under the Trump administration, such as the potential elimination of EV tax credits and the imposition of higher tariffs, introduce uncertainty for the industry. But it’s expected that electrified vehicles will continue to gain traction. Pure EVs are projected to capture 10% of total sales (up from roughly 7.5% in 2025), crossing 1.5 million units for the first time, per Cox Automotive. That said, hybrids are likely to remain a consumer favorite, offering a practical middle ground in the transition to fully electric mobility.
However, profitability pressure will persist as automakers balance production costs with competitive pricing. Automakers may need to adjust their strategies to navigate these challenges while maintaining momentum in electrification.
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