US Light Vehicle Sales Tumble on Tariff Fears

US light vehicle sales dropped to a seasonally adjusted annual rate of 15.65 million units in May 2025, falling short of market expectations of 16.3 million and marking the steepest monthly decline in nearly five years. This was down sharply from a downwardly revised 17.25 million in April, the largest monthly decrease in sales pace since the COVID-19 shock in April 2020. The decline followed a surge in March, when sales hit their highest level since March 2021 as buyers rushed to get ahead of anticipated price hikes linked to President Trump’s proposed tariffs on imported vehicles.

U.S. light vehicle sales fell to a seasonally adjusted annualized rate of 17.27 million units in April 2025, down from a four-year high of 17.83 million in March but well above market expectations of 15.7 million. Over the past two months, sales averaged an annualized rate of 17.6 million, driven largely by tariff-related buying—significantly higher than the estimated 16.0 million rate without such effects. According to Wards Intelligence, there were signs the surge began to lose momentum by the end of April, likely as tariff-driven "exuberance" faded and inventories tightened. Demand remained notably stronger for full-size and luxury trucks, while sales of more affordable vehicles—including cars and small to midsize CUVs and SUVs—lagged behind.

U.S. light vehicle sales surged to a seasonally adjusted annualized rate of 17.77 million units in March 2025, the highest level since March 2021 and well above the combined January-February total of 15.8 million. Buyers rushed to dealerships to get ahead of potential price hikes, while automakers accelerated fleet deliveries in anticipation of impending tariffs. Looking ahead, regardless of any tariff-related impacts, March’s strong performance is expected to dampen sales in the second quarter due to further depletion of dealer inventories, which were already lean by industry standards before the month began.