Bain Sees U.S. Car Market Shrinking by 2 Million Units by 2040 as Prices Near $50,000
Updated
Updated · Gizmodo · Jun 28
Bain Sees U.S. Car Market Shrinking by 2 Million Units by 2040 as Prices Near $50,000
2 articles · Updated · Gizmodo · Jun 28
Summary
Bain projects the U.S. auto market will contract by more than 2 million units by 2040, with competition turning “ferocious” as too many brands chase too few buyers.
Near-flat population growth, lower fertility and reduced immigration are shrinking the buyer pool, while younger consumers are delaying driving or using ride-hailing more often.
Average new-car prices around $50,000 are worsening the squeeze: monthly payments have climbed 30% in four years, and 1 in 5 new-vehicle payments now exceeds $1,000.
Older Americans already dominate demand—buyers 55 and older account for nearly half of new-car purchases—while 18- to 34-year-olds fell from 12% of registrations in 2021 to under 10% last year.
Bain says vehicles are staying on the road longer, with deregistration rates dropping from 6% in 2000 to 5% in 2025 and potentially 4.4% by 2040, reinforcing pressure for industry consolidation.
As the US auto market shrinks, what core strategies will separate the industry's ultimate survivors from its failures?
Why does Gen Z prize car ownership over homes, and how can automakers capitalize on this surprising trend?
Can robotaxis ever truly overcome the simple economics and convenience of owning a personal car in America?
The End of Growth: U.S. New Vehicle Sales Projected to Fall Through 2040 Amid EV Surge and Demographic Change
Overview
The U.S. automotive market is undergoing a major transformation, having already reached its peak in new vehicle sales. Looking ahead to 2040, unit sales are expected to stagnate or gradually decline, pushing automakers to move beyond traditional growth strategies. This shift is driven by the rapid rise of electric vehicles, which are projected to make up over 75% of new sales by 2040, fundamentally reshaping the industry. As a result, there is growing attention on emissions and battery recycling, while automakers must adapt to changing consumer preferences and prepare for the future impact of automation and new technologies.