President’s policies impact sales

Registrations of new light-vehicles in the US increased by 2.4 per cent to 16.2 million units last year when compared to 2024. 

The industry there experienced several shocks in 2025 including tariffs on imported vehicles and parts as well as the canning of tax credits for electric cars.

That said, the tariffs announced by President Donald Trump, pictured, induced some consumers to pull ahead purchases in last year’s second quarter before they took effect. 

The end of EV tax credits on September 30 spurred buying activity in the third quarter leading to a record-high monthly market share for battery electric vehicles (BEVs) of 11.8 per cent. 

Sales of BEVs then dropped off significantly. Their market share halved to 5.9 per cent in December compared to the record set in September. 

For the whole of 2025, BEV sales totalled 1.26m, up by 1.2 per cent compared to 2024. Despite that increase, their share of the market declined year on year by 0.1 per cent to 7.7 per cent.

Meanwhile, sales of conventional hybrids in the US rose significantly in 2025. They reached 2.05m units for a year-on-year jump of 27.6 per cent. 

Given the changes in the regulatory landscape, the National Automobile Dealers Association (NADA) expects BEV sales growth to continue to cool and those of hybrids to increase as marques build vehicles with powertrains more in-line with current consumer demand. 

Despite concerns of significant hikes due to tariffs, average transaction prices increased modestly as most OEMs absorbed much of the extra costs. 

According to JD Power, the average transaction price for a new light vehicle in America in December 2025 should total US$47,104 or about NZ$82,000 – up by 1.5 per cent compared to the same month in 2024. 

The average monthly payment on a new-vehicle finance contract last month will likely reach US$776, an increase of US$22 compared to December 2024. JD Power estimates the average interest rate on such contracts will be 5.84 per cent in December 2025 for a drop of 32 basis points year on year. 

Looking ahead to 2026, NADA is optimistic about new-vehicle sales although there will be challenges as the industry adjusts to evolving regulatory and trade environments.

A spokesman says: “With the passage of the One Big Beautiful Bill last year, we expect tax season will provide a solid boost to spending and be a tailwind for new-vehicle sales.

“However, a lacklustre labour market may cause some consumers to wait before buying a new vehicle. Still, we expect a solid year for new light-vehicle sales with a forecast of 16m units in 2026.”