White House cheers upbeat auto sales in 2025 — but analysts warn of downturn this year

• GM, Toyota, and Lexus reported annual sales increases of 5.5%, 7%, and 8% respectively, while demand centered on gas-powered trucks, SUVs, and hybrids rather than EVs
• Average new vehicle prices reached $47,104-$49,740 in December 2025, up from prior months, with further increases expected as tariff costs are passed to buyers
• Ford and GM scrapped EV programs after Trump ended the $7,500 EV tax credit, taking charges of $19.5 billion and $1.6 billion respectively to pivot back to gas vehicle production

Summary

Key Performance Data:

US auto sales rose 2.2% in 2025 to approximately 16.2 million vehicles, exceeding analyst expectations despite tariff concerns. Average transaction prices reached $47,104 in December 2025 (up $715 or 1.5% year-over-year), with Kelley Blue Book reporting $49,740.

Company Performance:

• Winners: General Motors (+5.5%), Toyota (+8%), Lexus (+7%), and Ford (highest sales since 2019)
• Losers: Stellantis (-3.3%), though Jeep posted its first annual sales gain since 2018
• Strong demand centered on gas-powered trucks, SUVs, and hybrids

Market Implications:

Analysts warn of a 2026 downturn as automakers begin passing tariff costs to consumers. Cox Automotive and Edmunds both project flat or declining sales ahead. Toyota faces particular pressure with 23% of vehicles imported from Japan (15% tariff) and 28% from Mexico/Canada (25% tariff). Executives stated they cannot absorb costs indefinitely and are at manufacturing capacity in the US.

Policy Impact:

The White House credits Trump policies including tax deductions on auto loans, relaxed fuel standards, and manufacturing incentives. The $7,500 EV tax credit ended in September 2025, triggering a pre-expiration sales spike but prompting major automakers to abandon EV programs. GM took a $1.6 billion charge; Ford absorbed $19.5 billion scrapping electric F-150 Lightning and other EV projects.

Outlook:

Industry faces headwinds from tariff-driven price increases and economic uncertainty, with automakers unable to maintain current pricing without passing costs to consumers.