How U.S. Vehicle Production Has Shifted Over 45 Years

How U.S. Vehicle Production Has Shifted Over 45 Years

Over the last few decades, vehicle production in the U.S. has dramatically shifted, with SUVs emerging as the indisputable frontrunners.

Once perceived as vehicles solely for off-road capabilities and adventuring (hence the name sport utility vehicle), SUVs soon became a useful transportation alternative for large families. Shortly after, they became the top-selling models for many automakers.

The graphic above uses data on the annual production shares of different vehicle types from the U.S. Environmental Protection Agency (EPA) to explore the factors that have led to the surging popularity of SUVs.

U.S. Vehicle Production: The Rise of SUVs

As SUV production has evolved, they’ve started to blur the line between car and truck classes. The EPA classifies most two-wheel drive SUVs under 6,000 lbs as cars (car SUVs), while those with four-wheel drive or above 6,000 lbs are trucks (truck SUVs).

In the American market, sedans and wagons dominated production from before the 1970s and well into the 1990s. Combined with smaller car SUVs, cars accounted for more than half of U.S. vehicle production well into the 2010s.

But the rapid rise of heavier truck SUVs has shifted the landscape. Sedans and wagons dipped below 50% of market production for the first time in 2004. And by 2017, trucks (including truck SUVs, pickups, and minivans) have been the ones accounting for over half of new vehicle production.

The growth of SUVs can be partially linked to all-wheel drive systems that gained momentum in the 1980s, with the Audi Quattro winning three rallies in its rookie season of 1981.

During that same time, new SUV models started to gain popularity, like the 1984 Jeep Cherokee—considered the first modern SUV with four doors—and Land Rover’s Range Rover, which entered the North American market in 1987.

By melding the benefits of space, performance, and comfort into one vehicle, SUVs began competing with both vans and station wagons as the quintessential family car. In the 90s, affordable midsize models like the Ford Explorer, Subaru Legacy Outback, and Toyota RAV4 paved the way for more middle-class families to enter the SUV market.

However, SUV production has been prone to fluctuations. Demand first started dropping as gas prices rose in the lead-up to the 2008 recession, which further strained finances and caused families to opt for cheaper non-SUV models. This significantly hurt the American “Big Three” automotive producers (GM, Ford, and Chrysler) at the time, for which trucks and SUVs had become the primary market.

SUV Fuel Efficiency and Millennials

Driven by improvements in fuel efficiency and societal trends, SUV demand roared back over the last 10 years.

Automakers have implemented fuel-saving technologies, such as direct injection and turbocharging, and have used more lightweight materials in construction to further boost engine efficiency.

While fuel efficiency has improved across all types of vehicles over the last four decades, sedans and wagons climbed far earlier in miles per gallon (MPG) scores, while SUVs have only more recently started catching up.

Since 2000, fuel efficiency for sedans and wagons improved by around 38%, while car SUVs saw a jump of 70% over the same time period, with both sitting at just over 30 MPG for 2021 models. Even larger truck SUVs, seen as the epitome of gas-guzzling vehicles, have become as efficient (in MPG terms) as sedans were in the 2000s.

Another factor influencing the market is the surprising entry of millennials, who now represent the majority of the population in the United States. Just a few years ago, automakers were fretting over millennials being a childless, car-less, city-dwelling group who cared little about buying cars or homes.

Fast forward to today—as millennials have aged and their wallets have gotten a little heavier, more of them are buying SUVs to drive to their suburban homes or just to fit their dogs.

SUVs are also benefiting from the shift to electric vehicles. In 2022, SUVs represented 46% of global car sales, and electric SUVs accounted for over half of global electric car sales.