The auto industry’s new tariff-driven reality appears to be setting in.
New-vehicle sales in the US slowed in May, according to industry reports, after consumers rushed to buy cars in March and April to get ahead of expected price increases.
Cox Automotive forecast a seasonally adjusted annual sales pace of 16 million, “a significant decline from March’s 17.8 million and April’s 17.3 million pace.”
“The vehicle market has been particularly strong since new tariff announcements in March, as many vehicle shoppers who were considering buying this year decided to pull ahead their purchase, before higher prices hit the market,” Charlie Chesbrough, Cox senior economist, said in a statement.
New-vehicle inventory on dealer lots fell 7.4% from April—which means it will be “more challenging for shoppers” to find the vehicle they want, according to Chesbrough.
“Given the swirling tariff, consumer, and auto inventory conditions, the expected May 2025 auto sales result will likely be the last period this year to post positive growth in year-ago and month-prior comparisons,” Chris Hopson, principal analyst at S&P Global Mobility, said in a statement.
Numbers are in: Kia reported a 5% YoY sales increase in May, its eighth straight month of growth. Sales of electric models like the EV6 and EV9 were down again last month.
Hyundai’s sales rose 8% YoY. The brand reported that sales of its hybrid vehicles grew 5% YoY, and that it had the “best May ever for hybrid and total electrified sales.” Sales of some electric models, like the Kona, were down, while others, like the Ioniq 6, were up. Hyundai recently started deliveries of a new EV, the Ioniq 9, which Randy Parker, president and CEO of Hyundai Motor North America, said in a statement “marks a powerful step forward in Hyundai’s EV journey at our Georgia Metaplant.”
Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
American Honda’s sales grew 6.5% YoY. The manufacturer reported record electrified vehicle sales, boosted by hybrids and growing sales of all-electric models like the Honda Prologue.
Ford’s sales were up 16.3% YoY. Its EV sales dropped 25%, while hybrids were up 28.9%.
Electrified: Combustion engine vehicles were projected to make up nearly 75% of new-vehicle retail sales in May, down 4.1 percentage points from a year ago, according to JD Power and GlobalData. Hybrids were slated to reach nearly 15% of the new-vehicle market, up 4.3 percentage points. EVs were on track to make up 8.1% of the market.
“The electric vehicle segment is facing a notable downturn this month,” Tyson Jominy, JD Power’s SVP of data and analytics, said in a statement. “Its share of retail sales has declined 0.5 percentage points year over year, marking the weakest performance since February 2024 and effectively erasing nearly two years of growth.”
“However, the broader electrification trend tells a more nuanced story,” he added. “Electrified vehicle sales—including hybrids and plug-in hybrids—have surged to 25% of total industry retail sales, driven largely by strategic shifts from automakers like Toyota and Honda. These manufacturers are aggressively transitioning their lineups toward hybrid models, contributing to an increase of 4.1 percentage points in overall electrification share from a year ago.”
Experts have said that the potential loss of EV tax credits, with other moves by the Trump administration to roll back pro-electrification policies, could slow down EV adoption.
EVs’ share of the new-vehicle market was expected to fall slightly to 6.8% in May, per S&P’s forecast, which S&P Global Mobility analysts said is “reflective of the uneasiness as automakers, dealers, and consumers continue to digest potential changes to BEV incentives.”