Tire Wholesalers NAICS 423130

May 9, 2025 - Tiremakers Still Investing in EV-Specific Tires

• 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. Costs have already risen significantly for motor vehicle and parts wholesalers - prices are up 4.7% in November 2024 compared to a year ago, according to US Bureau of Labor Statistics data. Employment for motor vehicle and parts wholesalers was flat at 0.3% year over year in October 2024 while wages for nonsupervisory employees were up 6.7%, reaching $30.53 per hour. An industry-wide shortage of mechanics and technicians as cars become more complex and computerized makes existing workers well-paid and in-demand.
• Major US tire distributor American Tire Distributors (ATD) filed for Chapter 11 bankruptcy protection in late October 2024, the firm's second bankruptcy filing in the past six years, according to Modern Tire Dealer. The company said the filing was necessary as it undergoes a reorganization which includes the option of a new ownership plan. ATD’s previous filing was in 2018, and the company emerged from bankruptcy after completing its recapitalization and lowering its debt load by $1.1 billion. ATD has said it will continue to operate during its current reorganization.