US consumers flocked to car dealerships in April as the specter of tariff-induced price increases loomed.
Cox Automotive analysts said that new-vehicle sales rose compared to April 2024, and JD Power estimated that buyers snapped up an extra 139,000 vehicles last month as they sought to get ahead of higher prices.
In the electrified vehicle market, hybrids continued to sell like hotcakes. Some automakers reported YoY declines in EV sales, but the lackluster results appeared to be due at least in part to standard model-year changeovers.
“The March and April sales surges have the potential to set up for future volatility; within the next three months, automakers will have to contend with new inventory and production levels subjected to tariffs, in addition to volatile economic conditions,” Chris Hopson, principal analyst at S&P Global Mobility, said in a statement.
The administration gave automakers some relief with an April 29 executive order that ensures automakers paying the 25% levy aren’t subject to other duties.
However, Wedbush Securities analysts wrote in a research note that “while this sounds good on paper…a US car with all US parts made in the US is a fictional tale not possible today and many factories/production hubs could take 4–5 years to build in the US.” They expect average vehicle prices to increase by as much as $10,000 and for the industry to incur up to $100 billion in annual costs as a result of the tariffs.
“With economic concerns rising and consumer confidence declining, the outlook for new auto sales from here is more troubling,” Charlie Chesbrough, senior economist at Cox, said in a statement. “If current policy holds, prices in the new-vehicle market will be noticeably higher in the coming months as more costly products replace pre-tariff inventory.”
