Bain Sees U.S. Auto Sales Falling by 2 Million Units by 2040 as Demographics Weaken
Updated
Updated · CNBC · Jun 28
Bain Sees U.S. Auto Sales Falling by 2 Million Units by 2040 as Demographics Weaken
1 articles · Updated · CNBC · Jun 28
Summary
More than 2 million annual U.S. vehicle sales could disappear by 2040, Bain said, warning the market is shifting from a long-assumed growth industry into a shrinking one.
A 1.6 fertility rate, immigration that Bain expects to run at roughly half the past 20-year net pace, and younger buyers delaying or skipping car ownership underpin the forecast.
Affordability is accelerating that shift: new-vehicle monthly payments are up 30% in four years, and nearly 1 in 5 new vehicles now carries a payment above $1,000.
Younger demand is already softening, with 18-to-34-year-olds' share of new registrations slipping from 12% in early 2021 to under 10% by mid-2025, while buyers 55 and older make up nearly half.
Longer vehicle life also reduces replacement demand—cars averaged a record 12.8 years on the road in 2025—and Bain said a more crowded market of about 450 nameplates could force 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.