White House cheers upbeat auto sales in 2025 – however analysts warn of downturn this 12 months
Sales of new autos in the US jumped about 2% in 2025, according to a new analysis – despite panicked warnings that President Trump’s tariffs would pummel the auto industry.
The White House boasted that Trump’s insurance policies had been to thank for the uptick, however many automakers said they haven’t absolutely handed alongside tariff prices to shoppers yet – and analysts are warning that sales might hunch as soon as those price hikes hit this 12 months.
“Most vehicle sales metrics in 2025 were slightly stronger than many forecast – including us,” Jeremy Robb, interim chief economist at Cox Automotive, said in a Tuesday assertion.
The White House boasted that Trump’s insurance policies had been to thank for the upbeat auto sales, however many automakers said they haven’t absolutely handed alongside tariff prices to shoppers yet. AFP by way of Getty Images
About 16.2 million new autos offered in the US in 2025, up 2.2% from the earlier 12 months, according to Cox Automotive, fueled by demand for gas-powered vans, SUVs and hybrids.
However, Cox Automotive expects US auto sales to decline 2.4% this 12 months as tariffs start to take a toll. Edmunds, an online automobile review and car pricing website, said it expects regular or decrease sales in 2026.
“While most vehicle sales figures in 2025 exceeded expectations, the outlook for 2026 suggests a slowdown across many important metrics,” Cox said.
Steep price tags
Last month, the average new-vehicle retail transaction price was estimated to achieve $47,104 – up 1.5% or $715 from December 2024, according to JD Power, an auto data analytics firm.
Kelley Blue Book positioned the average value of a new journey at $49,740 in December, barely down from a jaw-dropping $50,080 in October.
The steep price tags have led to some canceled sales and mounting delinquencies on payments while shoppers face ongoing financial uncertainty.
Still, General Motors, Lexus and Toyota reported annual US sales will increase of 5.5%, 7% and eight%, respectively.
Sales of new autos in the US jumped roughly 2% in 2025, according to a new analysis. REUTERS
Hyundai reported a record year of US retail sales, Honda Motor saw its best year since 2021 and Ford notched its highest annual sales since 2019.
Stellantis, which owns manufacturers including Ram and Dodge said sales fell 3.3%. But its Jeep model reported its first US annual sales gain since 2018.
Trump touts tariff triumph
Coming in the wake of doom-and-gloom predictions about the impression of Trump’s tariffs, the White House sounded a triumphant observe on Tuesday.
“These so-called ‘experts’ could not have been more wrong,” it said in a assertion. “Automakers are thriving.”
“This success validates President Trump’s all-out push to Make Driving Great Again.”
It cited a number of Trump insurance policies concentrating on the auto industry, such as tax deductions on auto loan curiosity funds, looser fuel economic system requirements, the end of a $7,500 EV tax credit score and billions spent on US manufacturing from automakers searching for to keep away from tariffs.
Automakers scrapped major plans for electrical car manufacturing in the US after Trump announced he would end the $7,500 federal tax credit score for EVs, which expired in September. Analysts attribute a spike in EV sales in early 2024 to the coverage change, with shoppers snatching them up before the tax credit score ended.
About 16.2 million new autos offered in the US in 2025, up 2.2% from the earlier 12 months, according to Cox Automotive. Getty Images
General Motors said last summer time it might use some crops initially slated for EV manufacturing to ramp up manufacturing of gasoline fashions. It was hit with a $1.6 billion charge due to the change in plans and said it anticipated more expenses in the future.
Stellantis and Ford also killed their pricey EV applications on a dime. The latter said it might take a $19.5 billion hit after scrapping a fully-electric version of its F-150 Lightning pickup, in addition to a new electrical truck and van.
“We had to come up with a better plan,” Ford CEO Jim Farley told Reuters earlier this 12 months.
Sales face headwinds in 2026
Some automakers are also making ready to cross alongside tariff prices to shoppers.
Toyota Motor North America has to date absorbed added tariff prices, however executives have said they will’t maintain out for much longer – and so they’re anticipating larger costs to dig into sales next 12 months.
About 23% of its autos are imported from Japan, which is presently dealing with a 15% tariff, while imports from Mexico and Canada – which have a 25% tariff – account for roughly 28% of its sales.
When it involves shifting more manufacturing to the US, the company is “capped out,” Andrew Gilleland, senior vice president of automotive operations was quoted as saying by Automotive News.
“The manufacturing people are going gray trying to figure out how to tweak it a little bit to get an extra 1 or 2%, but we’re close to max,” he said.
“Prices can’t stay the same with a 15% tariff. It’s just impossible for any brand to absorb that, there’s not enough margin in the car,” said Dave Christ, head of Toyota’s US division.
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