Ten years ago, the U.S. sold a record 17.6 million cars, trucks and SUVs, and some predict it may never come close to that number again.
Analysts at consulting firm Bain & Company said there are some signs that the market is about to contract further. Their analysis suggests that by 2040, sales could fall by more than 2 million cars due to falling birth rates, behavioral changes, rising car prices, and an increase in car substitutes.
Mark Gottfredson, a partner at Bain & Company, said these signs point to a future in which automakers compete fiercely for a shrinking number of customers.
Gottfredson said the auto industry has historically relied on a 1% annual growth rate as the total population grows. But around the world, government statistics show population growth is slowing, with some countries already seeing declines.
“It’s the perfect storm,” Gottfredson said. “It starts with population decline. It’s no longer a growth industry. It’s a declining industry. It’s a declining industry now that technology is destroying everything.”
In 2025, the U.S. birth rate was approximately 1.6 children per woman. Although not as low as some countries in Europe and Asia, it is considered below the replacement rate of 2.1, according to the Centers for Disease Control and Prevention.
Bain said that was offset by relatively high numbers of immigrants. About 1 million people have come to the United States, according to historical averages cited by the paper. But the company said it expects restrictive immigration policies to continue for the next 15 years, halving historic net immigration rates over the past 20 years and potentially reaching the low levels seen in 2019 again.
The behavior of the rest of the population has changed, Bain said, in part because of rising prices and affordable alternatives. Gottfredson said that from 1966 to 1984, nearly 70 percent of 16-year-olds did not have a driver’s license; today, half of 16-year-olds do not have a driver’s license. This statistic may reflect mere delays rather than outright rejections. Bain research shows that most people get their license by the age of 25.
Still, the share of new car registrations among people aged 18 to 34 fell from 12% in the first quarter of 2021 to less than 10% by mid-2025, according to S&P Global Mobility. According to the company, buyers aged 55 and older account for nearly half of all new registrations and have held the largest share for eight consecutive quarters.
“The driving force is affordability,” said Craig Deitch, founder and president of Telemetry, an auto industry market research company. Monthly payments on new cars have increased 30% over four years, and nearly one in five new cars now have monthly payments of more than $1,000, he added.
Forecasting firm AutoForecast Solutions expects U.S. new car sales to remain relatively flat at about 16 million vehicles through 2033, the farthest the company has released its forecasts.
“As we look to the future, young people will be more likely to take Uber or Lyft when they go somewhere,” said Sam Fiorani, vice president of global vehicle forecasts at the company. “There is still a group of young people who enjoy driving and want a new car, but fewer people can afford it.”
If robotaxis become widely available and affordable within the next 15 years, the proportion of the licensed population could drop by about 2 to 3 percentage points to 85%, according to Bain research. The number of vehicles per driver could drop from 1.2 to 1.1, which would equate to 10% to 20% of U.S. households eliminating one vehicle.
The forecast Gottfredson shared with CNBC is a revised version. He had previously targeted 2030, when sales would fall below 14 million vehicles, but said he had changed that assumption because self-driving cars were taking longer than expected to arrive.
However, population numbers are included.
“We already know how many people will be born 16 years from now and how many people will be old enough to drive at 16. So we can say with reasonable confidence that in 2040 we’ll see some decline in the United States. In places like Europe and most countries in Asia, the decline is even worse.”
Gottfredson said the most direct indicator of potential future declines is the rate of “deregistrations,” where vehicles are taken off the road and scrapped, like used cars, or exported to another market.
In 2000, the deregistration rate was about 6%, according to a Bain report. As of 2025, that percentage was about 5%. Gottfredson said this rate could fall to 4.4% by 2040. This is largely due to longer vehicle lifespans, which will reach a record 12.8 years on the road by 2025, according to S&P Global Mobility.
This can be reversed. The lifespan of electric car batteries is still uncertain. It’s also unclear whether automakers will be willing or able to update the software that is increasingly important to new cars.
But with vehicle prices so high, auto industry forecasters say the industry will need to find ways to keep fleets in service.
“You can’t put a five- to 10-year limit on today’s cars,” Fiorani said. “It’s unrealistic for someone to spend $50,000 or $100,000 and expect it to be trash within 10 years.”
If these trends continue, the U.S. auto industry could become even more competitive. Consumers already have around 450 nameplates to choose from in the country.
“Competition in the U.S. is going to be intense,” Gottfredson said. “There are too many automakers and brands competing for consumers. The market will need to consolidate.”
