The North American automotive industry faces a potential decline of 1.8 million vehicle sales this year alone, with stagnant growth over the next decade if the ongoing global trade war intensifies, warns Telemetry, a Detroit-based automotive advisory firm.
The latest forecast, shared exclusively with Reuters, paints a troubling picture of prolonged impact on vehicle sales across the U.S. and Canada, attributing the risks to tariffs and continued economic uncertainty stemming from global trade disputes.
Tariffs Weigh Heavily on Auto Industry
President Donald Trump’s 25% automotive import tariff, enacted on April 3, has had ripple effects throughout the industry. While the U.S.-Mexico-Canada Agreement (USMCA) provides relief to automakers who meet specific U.S. content thresholds, many vehicles manufactured in Canada and Mexico are still facing steep levies.
“Even with some U.S. content deductions, automakers are facing intense pressure on cost structures,” said Sam Abuelsamid, Vice President of Insights at Telemetry. “It’s not just a matter of production shifts—it’s a matter of survival for some plants and jobs.”
Automakers like General Motors and Stellantis have already reacted by realigning their production footprints. GM increased truck output at its Indiana facility, while Stellantis temporarily halted operations at two plants in Mexico and Canada. These shutdowns, in turn, affected operations at five related U.S. facilities.
Consumer Costs and Layoffs on the Rise
The average price of a new vehicle is approaching $50,000, while rising interest rates continue to squeeze affordability for everyday consumers. Tariffs, experts warn, will only add thousands more to vehicle sticker prices.
“Vehicle affordability is already a major issue for consumers,” Abuelsamid emphasized. “If tariffs remain in place, we’re looking at a drop in demand that can’t be offset by limited production shifts. Layoffs are likely to follow.”
To offset consumer hesitancy, companies like Ford and Stellantis have introduced aggressive incentive packages. However, these offers have only marginally eased buyer concerns about higher pricing in the face of inflation and rising financing costs.
BEVs Hold Promise Amid the Uncertainty
While internal combustion vehicle sales remain under pressure, the future is still bright for battery electric vehicles (BEVs), according to Telemetry’s long-range projections. In a best-case scenario—assuming no trade war and strong economic growth—BEV sales in the U.S. and Canada could reach 8.8 million units by 2035.
Globally, BEV sales are forecasted to top 40.5 million units over the next decade. Extended range and new model offerings are expected to contribute to this growth, despite the recent slowdown in EV sales momentum.
What’s at Stake: 7 Million Lost Sales by 2035
Telemetry estimates that if current tariffs persist until 2035, the U.S. and Canada could cumulatively lose about 7 million light-duty vehicle sales compared to a no-conflict scenario, where 24.6 million units would have been sold.
Such a sharp downturn threatens not just automotive manufacturing but the broader economy—affecting suppliers, dealerships, and workers in hundreds of communities.
“The danger isn’t just fewer cars being sold,” said Abuelsamid. “It’s an entire economic ecosystem at risk—an ecosystem that took decades to build and could unravel in just a few years.”
Looking Ahead
Industry leaders and policymakers face a critical juncture: resolve trade tensions or prepare for a sluggish decade in North American automotive sales. As the future of mobility tilts toward electrification, balancing international cooperation with domestic industry protection will be key to sustaining momentum—and jobs—in the years to come.
