Critical Shifts:
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Affordability prevents a pre-pandemic sales recovery: U.S. light-vehicle sales are projected to stay below 17 million annual units through the end of the decade, capped primarily by persistent consumer affordability constraints rather than supply chain issues.
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Powertrains are shifting toward hybrids as BEV plans pivot: Loosened regulations led to widespread battery-electric vehicle cancellations, positioning internal combustion and full hybrid electric vehicles to maintain dominance, with full hybrids expected to represent nearly a third of North American production by 2030.
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Global automotive manufacturing is fracturing into regional markets: Rising geopolitical instability and trade policy shifts are forcing automakers toward regionalization, requiring them to design and build vehicles specifically for three distinct markets—North America, Europe, and Asia—rather than relying on a single global strategy.
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According to Mobility Global’s latest forecast, U.S. light-vehicle sales are expected to reach 16.1 million units in 2026 and only 16.4 million by the end of the decade, remaining well below the roughly 17 million annual sales levels that defined the market before the pandemic. Analysts speaking last week at a Mobility Global media briefing said affordability remains the single biggest challenge facing consumers, contributing to a fundamentally different market environment.
The discussion came at a pivotal moment for the industry. Automakers are navigating geopolitical instability, economic uncertainty, and shifting trade policies, even as consumers wrestle with the persistent problem of what they can afford.
The U.S. automotive market has remained depressed since the pandemic with some of that due to supply chain shortages. But right now, the main reason Mobility Global doesn’t see the market returning to those previous levels and remaining below its potential is the affordability issue. “We don’t see the U.S. returning to pre-pandemic levels of volumes,” said Peter Nagle, Associate Director for Americas Demand Forecasting. “Obviously, there is something constraining the market from those 17-million-unit thresholds that we routinely hit back in, say, 2016, 2017, 2018, 2019.”
A myriad of factors have reshaped the automotive landscape in recent years. The past year has brought some significant changes to the U.S. regulatory and incentive framework – and in the compressed span of automotive timeframes. As emissions and fuel economy rules loosened, automakers rewrote product plans almost overnight.
“The resulting wave of battery-electric vehicle (BEV) cancellations may leave some suppliers wary of chasing future BEV programs,” said Eric Anderson, associate director for Light Vehicle Powertrain Forecasting. Even so, Mobility Global expects BEV assembly in North America to once again surpass 1 million units in 2027, according to its latest forecast.
The internal combustion engine vehicles and hybrids, however, the analysts said, are expected to remain central to the market as consumers continue to weigh cost, convenience and lifestyle in choosing their next car. Mobility Global forecasts North American assembly of full hybrid electric vehicles (FHEVs) to surpass 3 million units in 2027 – a 25% annual increase – with nearly a third of all North American light vehicle assembly expected to be FHEV by 2030.
The briefing also turned to China’s growing influence on the global automotive landscape. Analysts explored how conditions in China’s domestic market could shape automaker strategies worldwide. They pointed to a broader industry move toward regionalization and de-globalization.
“The auto industry is moving toward three major regional islands,” said Joe Langley, director of research and analysis. “North America, Europe and Asia, and automakers will increasingly have to build where they sell and design for the regions they serve. The difficult part is doing that while costs continue to rise.”
And there is no longer one global recipe for success, Langley added.
