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New-Vehicle Sales Show Resilience Amidst Tariff Pressure, According to J.D. Power
Despite the introduction of tariffs in early April, the new-vehicle market has demonstrated resilience, with sales showing positive growth as forecasted by J.D. Power. However, these tariffs have injected uncertainty and inflationary costs into the market, leading to some price increases and margin pressure on dealers.
In April, total retailer profit per unit from new-vehicle sales is projected to be $2,525, with the average incentive spending per unit reaching $2,808, up $209 from April 2024. The average time a new vehicle remains in the dealer's possession before sale is expected to be 52 days, an increase from eight days a year ago.
Average monthly finance payments in April are on track to reach a record high of $742, up $19 from April 2024. The average trade-in equity is expected to rise slightly to $8,313, an increase of $328 year on year.
Electric vehicles (EVs) are expected to account for 8.7% of sales, up 0.2pp from a year ago. The EV market coverage has grown 50% since a year ago, and EV inventory is at a healthy 6.5% of the industry. In the first quarter of 2025, the retail share of electric models grew 1.5pp to 9.5%.
Plug-in hybrid vehicles are on pace to make up 2.3% of sales, gaining 0.4pp from last April. Full-hybrid sales are expected to reach 12.6%, an increase of 2.9pp from a year ago. US final assembly vehicles are expected to make up 51.8% of sales in April, unchanged from a year ago.
Tariffs have affected some vehicle prices, with average transaction prices for new vehicles holding relatively steady from April to May 2025. Some manufacturers have raised sticker prices by around $600 on popular models partly due to tariffs. Automakers such as Mitsubishi have raised prices modestly to offset tariff-related cost increases.
Despite these price increases, total new-vehicle sales are expected to increase by 10.5% year on year in April 2025, equating to 1,519,897 units. The industry's inventory days of supply is at 63 days in April, up seven days from a year ago. Retail sales of new vehicles are expected to reach 1,284,826, a 14.7% increase from the same month last year.
Trucks and SUVs are on pace to account for 82.1% of new-vehicle retail sales, up 2.5pp from April 2024. Leasing is expected to account for 20.6% of sales this month, down 3.2pp from a year ago.
Retail buyers are on pace to spend $55.8 billion on new vehicles in April, up $9.8 billion from April 2024. The average used-vehicle price is trending towards $28,725, up $200 from a year ago.
Fleet sales are projected to decline 7.8% from a year ago, with fleet volume expected to account for 15.5% of total light-vehicle sales, down 3.1pp from a year ago. The seasonally-adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 17.9 million units.
Internal-combustion engine vehicles are projected to account for 76.1% of new-vehicle retail sales, a decrease of 3.8pp from a year ago. The average new-vehicle retail transaction price in April is expected to reach $45,764, up $887 from April 2024.
Retail inventory levels are currently at 2.15 million units, a 21.4% increase from April 2024. 59.5% of sales had positive vehicle gross, up 0.3pp from a year ago. 33.6% of vehicles sold in less than 10 days in April, down 0.3pp from a year ago.
Overall, the new-vehicle market has shown resilience in the face of tariff pressure, with sales still showing positive growth. However, these tariffs have led to some price increases and margin pressure on dealers. The market will continue to monitor these trends closely in the coming months.
- In the new-vehicle market, the positive growth in sales, despite tariff pressure, indicates a level of resilience, as reported by J.D. Power.
- Tariffs have introduced uncertainty and inflationary costs into the market, causing price increases and margin pressure on dealers.
- Electric vehicles are expected to make up 8.7% of new-vehicle sales, with the EV market coverage growing 50% since last year.
- The average transaction price for new vehicles remains relatively steady, although some manufacturers have raised sticker prices due to tariffs, with internal-combustion engine vehicles accounting for 76.1% of new-vehicle sales.
