Commentary: A Look Back at 2025 in the Automotive Industry

This year has been a loopy one, hasn’t it?

We saw the return of a President to the White House after a four-year gap. His administration made some very interesting moves that this country has not seen in around a century. 

Some of the policies laid out and executed by this administration have affected the automotive industry in many ways. These challenges are not new to us, but we certainly saw some serious impacts stemming from these recent moves. 

Before we dive in, we should take a look at where the automotive industry is at today. 

Currently, the projected Seasonally Adjusted Annual Rate (SAAR) for sales in the USA is between 15.2-15.7 million units. This projected figure is down from 2024, which netted 16.5 million in sales. 

There are many reasons for this slowdown in automotive sales. One, we are going through a round of higher tariffs on imports spurred on by a new trade war. New vehicle prices have risen in due to tariffs on both finished vehicles, as well as parts and components imported outside this country. The biggest impact on tariff-driven price increases is from vehicles that are produced in Japan. Although, we thought there was a tariff deal with them in place that is lower than the originally proposed rate. 

To add to the sales slowdown is the elimination of the Federal tax credit for electric vehicle buyers in the USA. The administration officially ended this credit on September 30, 2025. Consumers looking to get into an EV went into rush mode bumping sales in September. The next month saw some dramatic drops in sales of certain EVs. For example, sales of the Kia EV6 dropped by 71 percent, while Hyundai’s IONIQ 6 took a sales dive of 63 percent. Honda’s collaboration with General Motors, the Prologue, saw sales dried up to the tune of 81 percent. The drop in EV sales and interest in these sustainable vehicles has already claimed a victim, as Acura will drop the ZDX from their lineup. 

With the loss of the EV tax credit came a threat of new Federal guidelines towards rolling back emissions standards back a decade.  They also rolled back the planned fuel economy standard for 2031 50.4 MPG to 34.5 MPG. The claim by this administration is that it may help reduce the price of new automobiles. 

In the meantime, the rise in automobile prices and the elimination of EV tax credits has turned into an affordability crisis for consumers. Back in 2012, the average MSRP for a new vehicle was just over $30,000. Today, that average vehicle price is nearing $50,000. That constitutes an overall annual average increase of 27 percent. If one were to point to particular event that would spur on these increases in vehicle prices, it would be the COVID-19 Pandemic and the supply chain challenges it induced. That certainly had a lasting affect on the industry and our economy.

If you want proof on where all of this has led to, check out the front lines of the automotive transaction business – the dealership. Go into the finance office and you may be presented with longer-than-usual terms for your vehicle loan. What used to be a four-year term at reasonable cost has ballooned towards eight-year loans. These days, the standard four-year loan can cost you as much as a huge fraction of a month’s rent or mortgage. Interest rates have not been favorable, which does not help you on paying back the loan, either. 

There has been talk of solutions towards stemming the affordability crisis. Recently, the administration considered bringing in kei-class automobiles into our market – even producing them stateside. While these smaller automobiles originally developed for the Japanese market seem like one solution, one has to consider the impact on tariffs of those vehicles. 

However, we are in an SUV-driven market and options for less expensive and smaller vehicles are already on the decline. Especially when you have vehicles such as the Hyundai Venue now starting at over $22,000. Only the Nissan Kicks Play and Chevrolet Trax start a tad lower than that figure. 

In some corners, the chat has brought up another solution – importing inexpensive automobiles from China. That is a huge can of worms to open up, thanks to a massive tariff on imports from that country. In recent years, the Chinese automakers have made inroads elsewhere in the world – especially in the UK, the European Union, South America and Mexico. 

There was also talk that the Canadian automotive market could start welcoming Chinese imports. About 40 years ago, automakers from the former Soviet Bloc countries tried their hand at selling automobiles in that country to very mixed – albeit lower – results. On the other hand, if a manufacturer such as Hyundai can succeed up there when no one have ever heard of an automaker from the Republic of Korea, there might be a slither of a chance for the Chinese to enter into Canada. That is if the current government is willing to allow them to set up shop there. 

One last thought on this topic: No, the Fiat Topolino is not exactly what we had in mind when it cones to reversing the automotive affordability crisis. Not even close.

Nissan has been the focus on a lot of news this year. They have been reeling from a continuous crisis allegedly left behind by a former CEO some decade or so ago. The company reported losses of $4.5 Billion for the 2025 fiscal year. In response to these massive losses, they are set to close seven plants worldwide, while reducing the complexity of parts by 70 percent and relying on their alliance with Renault and Mitsubishi on products. A good example was the introduction of the 2026 Rogue Plug-in Hybrid, which happens to be a badge-engineered version of the Mitsubishi Outlander PHEV. 

This year was not all about crises and challenges to the automotive industry. There was one bright spot to report. It began with the resignation of a CEO at Stellantis. From there, a successor was put into place. In turn, the new CEO brought back a key executive into the North American operation – one that was seen as an outlier by the European leadership of the country. 

With Antonio Filosa and Tim Kuniskis in place, we saw some major steps towards rehabilitating the North American side of the mega merger. So far, they reintroduced HEMI V8 into Ram 1500, revealed the new Jeep Cherokee and Recon, updated the Jeep Grand Cherokee and rationalized the Grand Wagoneer lineup, and added an internal combustion engine into the Dodge Charger. There is more to come, as they announced investments into Chrysler and Ram brands. 

What will 2026 bring? Who knows! One would hope that there would be a handle on some things as we enter into the new year on all sides. All we can do is observe, tak notes, and hope for the best. 

All photos by Randy Stern and George Torline