Tire Dealers NAICS 441340

May 9, 2025 - EV Tire Investment Strong With Manufacturers

• Tire manufacturers continue to invest in Elective Vehicle (EV)-specific tires despite market ups and downs of demand for EVs, seeing them as a long-term investment in a vehicle class that will only continue to grow. About 300,000 EVs were sold in Q1 2025, per Cox Automotive, an 11.4% year over year jump. Regardless of how prevalent EVs become as auto manufacturers realize their EV conversion plans might have been overly aggressive, there are still millions of EVs on the road, making aftermarket tires a critical niche in EV replacement parts. EV tires are made out of softer rubber and have shallower treads to reduce roll resistance, have stronger sidewalls to support the increased weight of EV batteries, and include foam layers to reduce road noise. EV tires can cost 20%-30% more than regular tires, per Tire Warehouse, and can offer retailers higher margins.
• Demand for aftermarket tires grew across all categories in 2024 according to data from the US Tire Manufacturing Association. Replacement tires for medium trucks and buses had the highest growth with a 12.5% increase over the previous year to 23.4 million units. Light-truck tire shipments grew 7% (36.7 million units) and passenger tires grew 1.3% (222 million tires). Original equipment tires for light trucks also performed well for 2024 (up 13.6%), while medium truck/bus tires and passenger tires both fell 8% and 5.7%, respectively. Overall tire production could fall in 2025 with Bridgestone, Sumitomo, and Goodyear all either closing US plants or cutting back on manufacturing. Those closures are expected to shrink tire output by 4 to 5 million tires.

• Consumer prices for tires rose 0.4% in December 2024 compared to a year ago and, per the Consumer Price Index. Anticipated foreign tariffs on consumer goods by the Trump administration have already spooked auto makers and prices could potentially skyrocket if the tariffs go into effect. In addition, the automobile industry faces a shortage of technicians and mechanics as cars become more complex and technical, which puts existing mechanics in a high-demand and high-paid position. Accordingly, the US Bureau of Labor Statistics (BLS) shows that employment for tire dealers was flat at 0.5% year over year in October 2024. Wages for nonsupervisory employees were up 8.2%, reaching $21.94 per hour.
• A new report from the US Tire Manufacturers Association (USTMA) in Recycling Product News found a 10.5% increase in end-of-life tire utilization in 2023, with 79% of end-of-life tires being consumed by end-use markets. Tires are one of the most recycled and reclaimed products, outperforming materials such as metal, glass, aluminum, plastic, and paper. The top market for end-of-life tires was tire-derived fuel, which accounted for a third of consumption and experienced growth of 11% from 2022. The second largest market for end-of-life tires was ground rubber, which consumed nearly 30% of end-of-life tires and posted an increase of 29% since 2019. Despite the improvements, the organization reports that 48 million end-of-life tires remain in stockpiles. The USTMA has a goal of recycling 100% of end-of-life tires.