The U.S. auto industry isn’t in the dire state some suggest. Domestic vehicle production reached 10.25 million units last year, a stable level compared to historical averages, aside from dips during the 2008 financial crisis and the COVID-19 pandemic1. Imports accounted for half of the 15.9 million passenger cars, SUVs and light trucks sold in 2024, matching a high seen in 2010. But domestic production still covered about 65% of vehicles sold locally, in line with the long-term average.
While the U.S. imports a significant number of vehicles, that trend hasn’t worsened sharply. However, the country now relies far more on imported auto parts. Imports of these parts more than doubled since 2008, climbing from $90 billion to $197 billion, reflecting the increasingly global nature of car manufacturing. Despite these shifts, job losses haven’t spiraled. The auto and parts sector employs around one million people, down from early 2000s levels but stronger than during most of the past decade.
In short, while globalization has reshaped how cars are made, the U.S. auto industry remains a major player with stable output and steady employment.
#What Are The Implications For Investors?
For investors, the resilience of U.S. auto production and stable domestic sales suggest that the industry remains a cornerstone of the American economy, even in the face of rising imports and global supply chain shifts. The growth in auto parts imports highlights opportunities in logistics, manufacturing automation, and reshoring initiatives, which have gained momentum under federal programs like the Inflation Reduction Act and CHIPS and Science Act. These shifts come as companies look to reduce dependence on foreign suppliers and build regional supply chain resilience.
Policy uncertainty, including the possibility of new tariffs driven by geopolitical tensions or election-year platforms, could disrupt supply chains in the short term. However, such measures may also trigger new investment in domestic parts production and assembly, particularly in the electric vehicle segment. Meanwhile, steady employment figures and demand levels point to a market that still has long-term potential, particularly for firms that adapt to evolving trade dynamics, embrace electrification, and respond to changing consumer preferences.
#What Are The Implications For The Planet?
For the planet, today’s auto industry still leans heavily on complex global supply chains that increase transport emissions and make it harder to manage environmental impact. But that’s starting to change. Governments in the U.S. and Canada are pushing for more localized production and stricter emissions rules—trends that could drive cleaner, more efficient vehicle manufacturing at home.
For investors, this shift opens the door to opportunities tied to the green transition. Growth in electric vehicles, battery plants, and regionalized parts production is picking up speed, backed by policy incentives and consumer demand. Companies that lower their carbon footprint while building more sustainable supply chains could earn regulatory support, cost advantages, and stronger brand loyalty.
However, support for EV manufacturing has become more complex. The current administration has expressed skepticism toward previous clean energy incentives, with discussions about repealing the Inflation Reduction Act, which could impact EV-related investments and job projections. Investors should monitor ongoing policy changes that may affect the viability and profitability of such investments.
In short, as the industry moves toward cleaner production and more regional resilience, retail investors have a chance to align financial returns with environmental progress.