Despite political and economic upheaval under the Trump administration, the U.S. auto industry saw a significant uptick, largely driven by a rush of panic buying. Concerns about rising import tariffs and the potential rollback of electric vehicle (EV) tax incentives led many consumers to make early purchases, according to analysts at Cox Automotive. However, experts warn that this spring sales spike may cool off dramatically as the year progresses.
Charlie Chesbrough, senior economist at Cox Automotive, noted that the sales boost is now “in the rearview mirror.” He cautioned that the second half of 2025 is likely to face headwinds from rising vehicle prices, lower inventory levels, and dwindling consumer demand. “If consumer sentiment falters or unemployment rises, that could cause buyers to hesitate,” Chesbrough said. “The demand may dry up just as inventory becomes constrained.” As tariffs begin to take a stronger toll on prices, dealers and consumers alike in the U.S. auto industry are bracing for a challenging fall season.
EV Market Faces Uncertain Future Amid Policy Changes
Another critical factor weighing on the U.S. auto industry is the potential expiration of federal EV tax credits. A $7,500 credit for qualifying electric vehicles is set to expire at the end of September under a new tax and spending bill recently passed by the U.S. Senate. Stephanie Valdez-Streaty, Director of Industry Insights at Cox Automotive, warned that the looming deadline could create a short-term sales rush followed by long-term hesitation, especially among cost-sensitive consumers.
General Motors emerged as the leader in EV sales in the second quarter, reporting a 111% increase, led by its Chevrolet Equinox EV. In contrast, Ford’s EV sales declined 31%, although its hybrid vehicle sales were up 24%. Stellantis, which entered the EV market later than its competitors, is yet to gain significant traction but has benefited from strong plug-in hybrid sales. Valdez-Streaty emphasized that the EV market within the U.S. auto industry remains volatile: “Electrification is not a straight line,” she said.
Automakers Navigate Mixed Results and Tight Supply
While overall U.S. auto industry performance remained positive in the second quarter, signs of softening emerged. Toyota, Hyundai, and Kia all posted record first-half sales, but June growth was flat or modest compared to earlier months. Mazda’s sales were up 3.9% this year but down in June, while Nissan saw a 6% drop in second-quarter sales.
Ford reported a 14% increase in sales between April and June, though June’s performance lagged behind April and May. General Motors saw a slowdown in sales growth, falling from 17% in the first quarter to just 7% in the second.
Dealerships are now grappling with low inventory and uncertain delivery timelines, echoing the supply constraints experienced during the COVID-19 pandemic. “We don’t have that radical amount of cash ready to spend out there,” said Jeff Laethem, a Detroit-based GM dealer. “Now there’s scared money chasing fewer goods.”
Consumers, wary of rising prices and shifting policies, are adopting a wait-and-see approach, with many delaying purchases until the economic outlook becomes clearer. Analysts suggest that steady pricing strategies such as employee discounts may be the key to sustaining sales through the turbulent months ahead in the U.S. auto industry.
