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Runtime: 11:26
0:00 Analysts Forecast Big Drop in U.S. Car Sales
1:33 China Car Sales Up Strong in March
2:07 China Exports Down on Russian Tariffs
2:27 Musk & Navarro Diss Each Other
3:29 U.S. Traffic Deaths Finally Drop–A Bit
3:59 VW To Launch 3 New EVs At Shanghai Show
4:58 Kia Developing EV Pickup for U.S.
6:35 Foxconn To Build 2 EVs In U.S.
7:37 BYD Cuts Prices Even More
8:27 BMW Show Humanoid Robot Working U.S. Assembly Line
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ANALYSTS FORECAST BIG DROP IN U.S. CAR SALES
President Trump’s tariff barrage is probably going to hurt U.S. car sales this year. All the major forecasting firms are lowering their sales projections. Bank of America believes U.S. car sales will drop anywhere from 2.4 to 3.2 million vehicles, which would be a financial disaster for most automakers and suppliers. Cox Automotive is not as pessimistic. It says sales will only fall 2% from last year. But it also thought sales would be a lot higher this year. Morningstar is a little more pessimistic than Cox Automotive and sees sales dropping by 400,000 vehicles. Global Data sees sales coming in around 14.9 million vehicles this year and 14.5 million next year. Morgan Stanley is in the same ballpark. And Telemetry says sales in the U.S. and Canada will drop by 1.8 million this year. So, here’s our Autoline Insight. The rule of thumb in the industry is that everyone can make money at 16 million units a year. Most would struggle to hit breakeven at 15 million. And nobody makes money below that. So, here’s the key thing to watch: Tier 2, 3 and 4 suppliers. They’re the canaries in the coal mine, so to speak. If volume drops to 14 million, they’re going to start collapsing.
| U.S. 2025 CAR SALES FORECASTS | |
|---|---|
| Bank of America | -2.5 to -3.0 Million |
| Cox Automotive | -300,000 |
| Morningstar | -400,000 |
| Global Data | -1 Million |
| Morgan Stanley | -900,000 |
| Telemetry | -1.8 Million (w/Canada) |
| Source: Automotive News | |
CHINA CAR SALES UP STRONG IN MARCH
Meanwhile, China’s new car sales shot up 14.4% in March to 1.9 million passenger vehicles, which is the fastest growth in 10 years. Sales of New Energy Vehicles shot up 38% to 991,000 units, capturing 51% market share. Even so, the March sales rate would equate to about 22.8 million vehicles for the year. And the Chinese market has been stuck in the 22 million range for about a decade.
CHINA EXPORTS DOWN ON RUSSIAN TARIFFS
Meanwhile, China’s car exports dropped 8% in March, and a key reason is that exports to Russia fell by 50%. Why? Because Russia slapped higher tariffs on imported cars, and China is about the only country exporting cars to Russia these days.
MUSK & NAVARRO DISS EACH OTHER
It’s hard to separate politics and the auto industry these days, especially with some of the top officials in the Trump Administration throwing hand grenades at each other. Yesterday, Peter Navarro dissed Elon Musk and Tesla as not being a true car manufacturer, he called them a “car assembler.” That, of course, ignores the very high degree of vertical integration at Tesla. So, Elon fired back on X that “Navarro is truly a moron,” and that he “is dumber than a sack of bricks.” Navarro and Musk are battling each other because Navarro wants high tariffs on everything, while Musk wants to see them negotiated down to zero.
U.S. TRAFFIC DEATHS FINALLY DROP–A BIT
U.S. traffic deaths soared during the Covid pandemic because drivers were being less safe with fewer cars on the road. But NHTSA reports that traffic deaths fell last year to the lowest number since 2020. 39,345 people were killed, a drop of 3.8% compared to 2023. And while it’s encouraging to see the number of traffic deaths fall, they’re still about 3,000 higher than in 2019.
VW TO LAUNCH 3 NEW EVs AT SHANGHAI SHOW
Volkswagen’s China EV sales in the first quarter fell by 37%, while its overall sales in the country were down by 7.1%. But VW thinks it can turn that around with three all-new vehicles, one coming from each of its Chinese joint venture partners. FAW and VW are going to launch an electric sedan, SAIC and VW are coming out with a range extended or EREV B-segment SUV and JAC and VW will have an all-electric SUV. Volkswagen says it was able to cut design and development time by more than 30% with the models and production versions are supposed to start launching next year. By 2027, the company expects to have 20 new energy vehicles or NEVs in the Chinese market, which is giving it confidence in its future. VW’s CEO said “We have everything it takes to be successful in China.”
KIA DEVELOPING EV PICKUP FOR U.S.
Kia is coming out with an all-electric pickup truck for North America based on a new EV platform that’s designed for both city and off-road driving. That’s just one of the things that Kia revealed at this year’s Investor Day, so let’s dive into more of the details. The automaker will launch five new models this year, plus upgrades to other models, like offering the Seltos and Telluride with hybrids for the first time. Of the 3.22 million vehicles that Kia is forecasting to sell globally this year, which would be a 4% increase, it expects nearly half a million of those to be hybrids. And by the end of the decade, Kia thinks hybrid sales will reach nearly a million units. In terms of pure EVs, the EV2, EV3, EV4 and EV5 are all coming to the lineup. Kia expects those models to push its total EV sales to 1.26 million by 2030, but that’s actually 340,000 units lower than last year’s forecast. However, it believes that EV pickup we already mentioned, the all-new Tasman truck and its PBVs will help offset a good portion of the lower EV sales. The Tasman and PV5 commercial van launch this year, followed by the PV7 in 2027 and the PV9 in 2029. Kia is forecasting to sell 4.19 million vehicles by the end of the decade, down from last year’s projection of 4.3 million.
FOXCONN TO BUILD 2 EVs IN U.S.
Taiwanese contract manufacturer Foxconn, which is best known for making electronic products like Playstations and iPhones, is making a big push to build EVs for automakers, especially Japanese companies. Last month, Foxconn formed a partnership to make EVs for Mitsubishi and the company has also held talks with Nissan and Honda. And earlier today, Foxconn held a conference in Tokyo to tout its EV manufacturing capabilities. According to the company’s chief strategy officer, Foxconn will have several Japanese partners within the next year but he declined to name the companies. He revealed that electric cars and buses made by Foxconn will be on roads in the next few years, including two models for the U.S. And he also added that Foxconn is building or retooling facilities in the U.S., Taiwan and Thailand and it’s looking to expand capacity to India and the Middle East.
BYD CUTS PRICES EVEN MORE
With XPeng raising prices of its X9 minivan, we wondered if the price war in China was coming to an end? But it looks like that price hike might have more to do with poor sales. BYD is cutting prices on its Ocean Series lineup, including a version of the Seagull without smart driving technology that starts at about $7,700. That’s roughly $1,800 cheaper than the previous starting price, which included the driver assistance features or what BYD has dubbed “God’s Eye.” We were impressed by the Seagull during a quick test about a year ago and that was when it didn’t have any smart driving tech and cost $11,500. So, we think this new version will help expand sales even more.
BMW SHOW HUMANOID ROBOT WORKING U.S. ASSEMBLY LINE
BMW is showing off the progress it’s making with humanoid robots in its South Carolina assembly plant. It started testing them last year with units made by California startup Figure. BMW posted a video showing the robots at the plant, placing metal parts on a fixture to be welded, showcasing its parts retrieval and motor skills. As you can see, the robot is pretty slow. We don’t think it can keep up with the pace needed for mass production or what everybody in the industry calls takt time. Even so, this is just the beginning. And no doubt these robots are going to become faster and more skilled.
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Lots to digest today.
1. The gloom and doom predictions are all over the place. About $1 mill less units sold, but with a huge variance. Which confirms my view of forecasters, they know very little of what they are talking about, they cannot even agree among themselves, predicting from… 300k to… 2,500k less units sold.
2. Russia’s tariffs on its major source of cars, their buddies in China, strange. After the sanctions, the Chinese replaced the W Euro, Japan and Korean makers by a huge surge of 600,000 units annually exported to Russia.
3. Navarro is not only a moron of Joe Biden Caliber, he is probably also nuts, because he started it by falsely badmouthing Tesla as an assembler, while it is, as Sean so correctly said, far more vertically integrated than any other automaker. But he has Trump’s ear because he went to jail fro 4 months, not for any crime he did, but because he refused to comply with a Subpoena by the clowns in Congress about the Jan 6 protests.
4. Humanoid robots make good B-pseudo-sci-fi movies, but are foolish in assembly lines, Instead of trying to imitate flawed human workers who are restricted by their anatomy, they should have the shapes that are optimal for the job at hand.
5. I checked the S&P 500 a moment ago, and despite the steep falls after the Tariffs were announced and the foolish retaliation of various idiots with big egos around the planet instead of coming to the negotiating table, current S&P levels (a far better indicator of the market than the always quoted Dow which is just 30 big companies, or the Tech Heavy Nasdaq, the 500 companies of the S&P are still at the same price level they were a year ago.
I’m surprised that an electric pickup is a priority for Kia, when even Ford is not able to sell many of them.
The accuracy of those sales projections will depend a lot on what happens with the trade war. If there are huge price increases for half of vehicles in a month or two, sales will crash, and a lot of suppliers will go bankrupt. Then what happens? Also, when the price of iPhones and clothes goes up 30%, that will reduce the amount of money a lot of people have to spend on cars. Interesting, but scary times we live in.
Tried Google Pay again to “join” and over 48 hours later, it still fails to take my payment.
NO, I am not going to resume the recurring PayPal, monthly $5 payment. You’ve chosen the broken Google payment system . . . take it up with them!
Jan 6 protests??? You must have seen something different from what most of us saw.
Yeah, Russian tariffs on Chinese cars seems strange. Do they think that will bring the Germans, Japanese, and South Koreans back into the Russian market?
I guess they think humanoid robots are more versatile than task-specific industrial robots, but they make no sense. Yeah, maybe some people think they are cool.
I trust the Bank forecast the most, since financing availability and disposable income seem to affect sales the most and both seem headed down sharply . Not to point out the obvious, but if the range in the estimates reflect differences of opinion on when things will get back closer to normal, then that is reasonable. If it happens this year, then sales losses should be low by the end of this year. If it happens early next year, sales will be pushed into 2026 and this year will look horrible.
Another unknown is the future sales behavior of the 50% of purchasers who buy imported cars. If they switch to American cars, sales will hold up. If they wait to see if tariffs go down on imported cars, they might be waiting a long time. As the owner of an American made Honda Accord Hybrid and a Korean made Chevy Trax,, I know the situation is more complex than it looks. If the price of either goes up significantly, and they will, I would just wait. Nothing made in the US is inexpensive enough to compete with the Trax. Nothing else made in the US is well made enough to compete with the Honda if it rises in price. Only after the current stupidity ends, even if that takes 5 years, would it make sense for me to even consider a different make or model.
So, adding more vehicles to the roads results in a drop in traffic deaths. How ironic.
Forecasting is exponentially more difficult when worldwide and national changes are taking place in just about every sector of the economy at a rate that is difficult to keep up with, much less analyze properly. I expect sales will end up at the lowest end of the estimates provided. Time will tell, but our President isn’t doing much to inspire consumer confidence. Repair shops will get busier, for sure.
The humanoid robots will get better and faster, and are more easily adaptable for multiple types of tasks.
S&P was north of 6,000 in December, it dipped below 5,000 this morning, back to where it was last January. That is a 17% drop since Trump took office. Probably set a record with that move. Not sure about anyone else, but I was far happier with my investment account in December than I am today. What I have now are many stocks worth significantly less and a bunch of empty promises from Trump that he knows what he is doing. The vast majority of economists disagree with him, just as they did with Hoover when he signed Smoot-Hawley, taking us from a recession into the Great Depression. I don’t think history is going to be kind when describing Trump’s second term.
I am with musk on his observation of Navarro. What a silly thing to say about Tesla or any OEM that is producing cars. I probably would have not been so blunt/personal, but certainly would have pointed out the gross inaccuracy in his statement.
New car prices are already too high, so with the tariffs, I’m not seeing anything but a sales slump coming our way. Some of those that will be hurt the worst are makes from Stellantis (bye bye Chrysler, Alfa, and Maserati). And suppliers – wow, I’d hate to be in their shoes right now. But we knew what was coming our way, not just from the campaign trail but from the earlier 4-year disaster, yet the country wanted more of it, so here we are.
Surprise, surprise
https://finance.yahoo.com/news/live/stock-market-today-dow-sp-500-nasdaq-soar-as-trump-announces-90-day-pause-on-tariffs-for-most-countries-ups-levies-on-china-133616912.html
By earlier 4-year disaster I assume we can agree you mean the Biden administration. If not, then lets remember the last 4 years of : record high inflation, record high illegal immigration receiving billions in govt handouts, trillions in fraud and waste, much going to Ukraine for un unsustainable war to be laundered back to politicians, rampant crime covered up by reporting changes to hide actual statistics.
Fifty countries have contacted the government to renegotiate/eliminate the up till now one sided tariffs. The unfair world tariffs have been in place too long. Remember the world needs the US consumers much more than we need them.
Maybe the US auto industry should have built vehicles in the US instead of Mexico, Canada and China and using cheap imported parts. Were those savings passed on to consumer in the form of lower prices? No, record high vehicle prices..
But he’s increasing tariffs on stuff from China even more, so electronics, batteries, clothing, furniture, and about everything else you buy at Walmart will go up substantially in price. That’s not going to help car sales, as people have less “disposable income.” And then, we go through all of this again in 90 days.
Yeah, Navarro is pretty clueless, to not know that Tesla is one of the most vertically integrated car companies in the world.
Joe G, cars would be much more expensive than they are, if all of the parts were made in the U.S.
Also, you must have a short memory, to not remember the disaster that was the first Trump regime.
Joe G, cars would be much more expensive than they are, if all of the parts were made in the U.S.
The earlier 4-year disaster was from 2017 to 2021. I don’t have enough room to list all the terrible things that Felon47 did, but I think J6 is certainly enough. That was the culmination of a disaster of a presidency with a toddler who was upset that he didn’t win and get his way. But I don’t believe this forum should be used to discuss politics beyond how they effect the car industry.
Well well well, how things changed in the four hours since I posted here. (I then walked down the half mile to our great riverside park and did my 90 min leisurely walk and walked back (2 hrs total), then went to bed and read the second half of Ian Fleming’s “Live and let die” (published in.. 1954, in one place he was praising the… Cord they were driving), quite different but not necessarily better than the movie), then I went to the Living Room and checked the markets.
Apparently Trump did the right thing and listened to all-around genius Elon Musk and not the “Dumber than a sack of bricks” tariff cheerleader Navarro, and reversed all the tariffs except on China,
The Dow closed 2,962 points higher than yesterday. For the younger ones here, on Black Monday 1987, when the same Dow fell 22%, it fell from a ‘high’ of 2,700 points or so.
The Tech Heavy Nasdaq did much better, up more than 12%, vs the Dow’s less than 8%.
The SP500, better market average than the above two, rose over 9.5%.
Wow!
While, as recommended by legendary Peter Lynch of Magellan fame, I always invested money I did not need (and hence my life would not change one iota if they vanished), and while I can’t take it with me*, for some strange reason I seem to be happier when I win a million or so (exact $ to come at 5:30 ET), than losing same amount (both times on paper, not for real) in the week after the tariffs.
* If you live in MI, you can actually take it with you, in the sense that you can leave it in a ‘revival trust’ which you can keep after you are ‘dead’ (note the quotes!) and use just in case the optimists prove right once again, and those who opt for ‘cryopreservation’ can be revived 100 or so years later, with help from the 1,000,000 times better science and tech at the time.
With so many technical details that Peter Navarro said in his announcement one really has to have compassion and with his apparent age, some sort of senile dementia must be going on, and while one has to be concerned that Biden was not removed from office certainly Mr. Navarro needs to be removed or put in a powerless position
Remulus, things look highly suspicious that Trump is creating his market chaos so his friends can buy low and sell high with the deliberate market swings. Is he telling people what he will do when? If so, that is, presumably illegal, but in any case, this chaos is highly destructive, and has turned the US into a pariah nation.