US car buyers reverse major trend in second half of 2025 | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Carmakers such as Ford played the change in the U.S. economic policy perfectly.

The American auto industry had just weeks notice that President Donald Trump was moving forward with a plan to impose universal tariffs on all imports coming into the country, and that automotive tariffs would be significantly increased.

U.S. 2025 new-vehicle sales forecast

GM: 2.83 million vehicles (+5.1% year over year); 17.3% market share
Toyota: 2.52 million vehicles (+8.4% YoY); 15.5% market share
Ford: 2.18 million vehicles (+5.6% YoY); 13.4% market share
Hyundai: 1.84 million vehicles (+7.9% YoY); 11.3% market share
Honda: 1.42 million vehicles (+0.6% YoY); 8.8% market share Source: Cox Automotive

The tariffs announced on April 2 increased automotive import tariff burdens to 25%, resulting in billions of dollars in costs for both foreign and domestic automakers.

At the same time, the president pressured the companies to keep prices the same as they had been before the new tax burden. So buyers took the signal to rush and buy vehicles they had been shopping for before the tariff levee inevitably broke and carmakers responded to rising costs by raising prices.

Ford rode dealer incentives, combined with consumer anxiety about tariffs, to become the top-selling brand in the U.S. during the year’s first half. Ford said total sales in the second quarter rose at a rate seven times that of the overall auto industry.

It sold 1.1 million units in the first six months, a 6.6% year-over-year increase.

But Ford wasn’t the only beneficiary, as GM was able to increase U.S. market share above 17%, its most substantial presence in the U.S. since 2017, and other brands also saw sales rise.

“Automakers are providing healthy incentives to keep sales flowing. Prices are trending higher, but just as we are seeing in the broader retail markets, there’s sufficient demand and generous incentives out there, and that’s driving the market,” said Cox Automotive Executive Analyst Erin Keating earlier this year.

However, as incentive spending dwindled and car prices increased, consumer interest in the auto industry cooled off in the second half of the year.

Car sales were strong in the first half of 2025, fueled by pre-tariff demand and generous dealer incentives.

Photo by milorad kravic on Getty Images

Car sales crater in the fourth quarter, but won’t stop the best sales year since 2019

New car sales showed weakness in the third quarter and continued to decline in the fourth, according to Cox Automotive sales data.

The firm expects the December seasonally adjusted annual rate of sales to finish near 15.9 million, down from last year’s 16.8 million December pace but up from November’s 15.6 million pace.

General Motors Q3 facts at a glance

U.S. market share: 17%
Electric vehicles sold: 67,000
EV market share: 16.5%
Dealer inventory: Down 16% year over year
EV inventory: Down 30% since June Source: General Motors

December sales volume is expected to fall 3.5% year over year.

Despite the end-of-the-year lull, new vehicle sales of 16.3 million will finish the year up 1.8%, making this year the best since 2019.

General Motors is forecast to end the fourth quarter with over 685,000 vehicles sold, an 8.7% year-over-year decline, giving it the 2025 sales crown with more than 2.8 million vehicles sold this year.

GM sold 5.1% more vehicles than it did a year ago, reaching 2.7 million, as its market share rose 0.5% to 17.3%.

Toyota came in second for the second year in a row, selling 2.5 million vehicles. The 8.4% year-over-year increase was accompanied by a 1% rise in market share to 15.5%.

Downturn in EV sales hurts the auto industry

While U.S. EV sales reached record highs this year, much of that growth was driven by the expiration of the $7,500 EV tax credit in September.

Consumers purchased 90 different EV models in the third quarter, but only nine sold more than 10,000 units.

October sales by EV brand

Tesla: 40,650
Chevy: 5,910
Ford: 4,912
Cadillac: 4,344
Hyundai: 2,429 Source: Cox Automotive

Tesla Model Y and Model 3 sold more than 114,000 and 53,000 units, respectively, and the Chevy Equinox sold just under 25,000.

But those three models were outliers.

According to Cox Automotive, “the vast majority of EVs sell at a rate of far less than 2,000 units a month, or 6,000 units a quarter. In the volume-driven business of automotive manufacturing, low volume is the enemy; EV profitability remains a distant dream for nearly every automaker.”

Dealers sold 74,835 electric vehicles in the U.S. in October, according to Cox Automotive data, representing a 48.9% month-to-month decrease.

“October marked a sharp reversal for the electric vehicle (EV) market as the expiration of the federal EV tax credit cooled demand after three months of accelerated sales,” said Stephanie Valdez Streaty, director of industry insights for Cox Automotive.

“Buyers rushed to secure incentives before the deadline, but once it passed, momentum slowed. Inventories climbed quickly, and pricing shifted upward for both new and used EVs, reflecting a market in transition.”