Big Take The Great Car Buying Bonanza Is (Probably) Over
Jul 2, 2025
In this discussion, David Welch, Bloomberg's Detroit bureau chief, shares insights on the shifting landscape of auto sales amid looming tariffs. As buyers surged to dealerships following Trump’s tariff announcement, vehicle sales now face a steep decline. Welch highlights how major players like GM and Tesla are navigating these economic pressures. The future of EV tax credits and the resulting impact on car pricing and availability for consumers are also dissected, providing a fascinating look at the evolving automotive market.
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Tariff-Induced Buying Surge
- The auto market saw a buying bonanza before tariffs were implemented in July 2024.
- Many consumers rushed to buy ahead of the 25% tariffs causing a sales surge that later cooled down.
Tariffs Impact on Auto Pricing
- Tariffs on cars and parts vary by origin, affecting non-U.S. made vehicles heavily.
- Automakers are absorbing tariffs currently instead of fully passing costs to consumers.
Auto Industry Profit Strategy
- Vehicle affordability is a major concern with high prices and limited discounts.
- Automakers found profits improve by producing fewer cars and raising prices, a focus since the pandemic.