Report warns U.S. auto market could be substantially smaller by 2040, citing a long-term shift in demand and industry structure

The United States auto market is poised for a major contraction by 2040, according to a CNBC Top News report published June 28. The story characterizes the outlook as a “perfect storm,” arguing that the industry’s assumptions about demand and vehicle volumes may no longer hold, and that the slide could deepen rather than reverse as time passes.

CNBC reported that one forecaster described the change as fundamental, framing it as a structural shift rather than a temporary downturn. The report ties the smaller market to conditions affecting how many vehicles are bought and how frequently, without detailing those conditions in the material provided here beyond the broad claim that the combination of factors is worsening.

The report comes as the auto industry continues to operate within tightly managed production, supply-chain, and capacity decisions that depend on expected sales volumes. A sustained reduction in the number of vehicles sold in the U.S. would likely force manufacturers and their parts suppliers to adjust output levels, labor planning, and capital spending, particularly if the new equilibrium arrives faster than retooling and contract cycles.

While the CNBC piece does not provide, in the information available here, specific year-by-year sales projections or numeric market-size estimates, its central point is that the U.S. could move toward a “much smaller” auto market by 2040. That framing implies downstream impacts for dealers, lending and insurance products linked to new-vehicle purchases, and municipal tax bases and fee streams that can track vehicle turnover.

The report’s warning also highlights the planning horizon challenge for an industry facing overlapping transitions, including vehicle technology changes, evolving consumer preferences, and ongoing policy and regulatory uncertainty. When market size shrinks, even modest shifts in those variables can produce outsized effects on profitability and inventory risk, especially for brands that rely on consistent annual volume to maintain production economics.

CNBC did not indicate that any one variable alone is responsible, instead presenting the scenario as the result of interacting forces. The “perfect storm” characterization, combined with the view that it is expected to get worse, suggests the forecast is driven by more than a single cyclical recession or short-lived disruption, but by longer-term demand dynamics.

Because this account is based on a single reported forecast description, additional reporting and supporting data would be needed to verify the forecast methodology and the specific drivers behind the predicted contraction. Still, the publication’s publication date, June 28, 2026, places the warning squarely within current industry planning cycles and raises the stakes for how automakers and suppliers prepare for lower-volume outcomes ahead of 2040.