Higher vehicle costs and softening demand prompt nearly 1 million-unit cut for 2025 outlook
Goldman Sachs (GS) has sharply reduced its U.S. auto sales forecast for 2025, citing the impact of tariffs that are expected to significantly raise vehicle costs. The Wall Street firm now projects 15.40 million units will be sold next year, down from its earlier estimate of 16.25 million.
Although President Donald Trump paused reciprocal tariffs on most countries—excluding China—for 90 days, auto-related duties on steel, aluminum, and vehicles remain intact. These ongoing tariffs are expected to raise the average cost of both importing and manufacturing vehicles in the U.S. by several thousand dollars, according to analysts led by Mark Delaney.
The investment bank anticipates that new vehicle prices will rise by approximately $2,000 to $4,000 over the next 6 to 12 months as automakers attempt to absorb the additional costs. However, with consumer demand already softening, the industry may struggle to fully pass these costs on to buyers.
Goldman also reduced its 2026 U.S. auto sales forecast to 15.25 million units, down by 1.1 million. Global auto production estimates for this year were revised to 88.7 million units from 90.4 million, with a similar cut to 2026 forecasts.
Amid the revisions, Goldman downgraded Ford’s stock to ‘neutral’ from ‘buy’, citing rising costs, global competition, and weak demand. Ford recently introduced broad discounts to move inventory and stimulate sales ahead of anticipated price increases.
The news weighed heavily on automakers. Ford shares slipped nearly 5% in morning trading, while General Motors dropped 5.2%. Stellantis took the hardest hit, plunging 11.8%.
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