Analysts expect ‘steady sales’ of new vehicles in 2026

After several years defined by chaos and uncertainty, from the pandemic to chip shortages to tariffs, the new-vehicle market might see calmer waters in 2026.

In a recent analysis, Edmunds analysts forecast 16.3 million new-vehicle sales in 2025 and 16 million in 2026.

“These volumes reflect a market that, despite affordability constraints, policy changes, and economic uncertainty, has found a more natural balance in inventory, pricing, and days to turn,” Jessica Caldwell, Edmunds’ head of insights, wrote. “After several years of volatility, both consumers and automakers appear more comfortable operating in this new normal.”

Affordability challenges: Much like other parts of the economy, Edmunds analysts noted the rise of a “K-shaped divide” among new-vehicle buyers this year. More affluent shoppers ponied up for “larger, higher-priced vehicles,” while “price-sensitive shoppers have been pushed out of the new-vehicle market entirely” as a result of rising monthly payments.

One of the main trends Edmunds analysts expect to see in 2026 is the persistence of high, but stable, prices. Consumers may see some alleviation on monthly payments thanks to lower interest rates—but uncertainty around federal policy and supply chains are potential risks.

EV freefall: Edmunds analysts expect EVs’ share of the new-vehicle market to fall to about 6%, down from approximately 7.5% in 2025, in part due to the sunsetting of federal tax credits for EV purchases. EV sales have been falling since the credits expired at the end of September, and the sector is going through something of a correction period after years of project announcements and investments in battery-powered models.

“The shift reflects a cooling among shoppers who were previously motivated by subsidized lease offers on electric models rather than by the vehicles themselves,” Caldwell wrote.

Bright spots: Despite the drop-off in new EV sales, analysts aren’t all doom-and-gloom when it comes to electrification. For one thing, they’re optimistic that a coming influx of more affordable electric models will give consumers compelling new choices.

And they’re expecting a flood of off-lease vehicles (electric and otherwise) to hit the market in 2026, boosting inventory levels. Per Cox Automotive data, customers have leased more than 1.1 million EVs since 2023—and many of those cars could end up on used-vehicle lots in 2026 as consumers trade in and leases expire.

A recent JD Power analysis on the EV market uncovered a few other bright spots. One is that EVs tend to spark high rates of loyalty. A study JD Power conducted this year found that 94% of current EV owners “definitely” or “probably” plan to consider an EV for their next vehicle. And next year, nearly 250,000 franchise EV leases will expire.

Plus, nearly 60% of consumers who plan to buy or lease a new vehicle in the next year report being “very likely” or “somewhat likely” to consider an EV.

These predictions, according to Caldwell, “point to a year of steady sales rather than significant expansion, driven by genuine shopper demand rather than temporary incentives or market distortions.”