FI showroom red and grey logo
MenuMENU
SearchSEARCH

Tariff Impact Forecast

J.D. Power tries to foresee how duties will affect vehicle prices, sales.

by Hannah Mitchell
April 17, 2025
Tariff Impact Forecast

Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models, J.D. Power predicts.

Credit:

Pexels/Adrian Gambet

2 min to read


With the obvious caveat that the U.S. economy is challenging to predict right now, a new forecast at least tries to pin down what the auto industry could expect as the rest of the year unfolds.

The J.D. Power look ahead, while acknowledging the undeniable impact of current and impending U.S. trade tariffs on automakers, expects that brands won’t pass on the full cost to consumers since doing so would cut sales.

Ad Loading...

“In order to maintain reasonable volumes, a large portion of tariffs must be absorbed,” said J.D. Power President of Data and Analytics and Chief Product Officer Thomas King in the forecast.

With those qualifications, it forecasts new-vehicle price increases starting in the late spring and settling at an average of about 5% by the fourth quarter in what J.D. Power calls a “new normal.” That would translate to an average of $2,300 per vehicle, despite current tariff exposure for U.S. retail auto sales equating to an average of $4,782 per vehicle.

The price increases would in turn result in reduced sales for an 8% drop in annualized retail deliveries, or 1.1 million units, J.D. Power expects. Depending on how tariff policy plays out, though, it said the decrease could be as low as 5% or as high as 12%, not taking any larger economic factors into account.

Tariff effects would also be spotty due to automakers’ varying degrees of exposure based on the volume of vehicles and/or auto parts they import, the data provider pointed out. The tariffs could thereby bring different effects even within an individual brand’s lineup.

Automakers will need to absorb at least some of the tariff costs, including deciding whether to maintain lower-margin but highly tariffed models. They could move supply to markets less exposed to tariffs and increase domestic production, along with retooling parts sourcing, J.D. Power said.

More Industry

Up-close photo of car battery
Industryby Hannah MitchellApril 13, 2026

Automaker Increases Parts Recycling

Stellantis is adding a third end-of-life vehicle dismantling facility to feed its growing reuse business sparked in large part by autos’ growing lifespans.

Read More →
electric vehicle next to an urban charging station. EV Demand Diverges. F&I and Showroom logo
Industryby Lauren LawrenceApril 10, 2026

EV Interest Varies Regionally

U.S. consumer interest in electric vehicles lags behind other countries despite the rising gas prices caused by the ongoing war in the Middle East.

Read More →
Photo of the rear of a Mercedes GLC 400 electric SUV with a skyline in the background
Industryby Hannah MitchellApril 10, 2026

Brands Weighed on Projected Recalls

Research reveals the brands and models most likely to have higher recall rates over their lifetimes. While some brands rank high, addressing safety issues can be a selling point.

Read More →
Ad Loading...
car outline on top of a data background
Industryby Lauren LawrenceApril 7, 2026

Dealers Seek Actionable AI

Dealers are facing growing frustrations with current generic artificial intelligence tools, according to a survey by Lotlinx, which found they want a solution that understands their inventories.

Read More →
black background with orange text saying Alec Hagey Toyota Financial Services President and CEO effective April 6 with picture of Alec Hagey
Industryby Lauren LawrenceApril 6, 2026

Toyota Financial Services President Replaced

Scott Cooke has served in various roles with Toyota Financial Services for over 20 years, including president and CEO, which he retires from on June 30.

Read More →
photo of Volkswagen vehicle steering wheel and interior
Industryby Hannah MitchellApril 1, 2026

One of Earliest U.S. Auto Dealers Exits

The sale of two Minnesota franchises ends a rare multigenerational business while adding to one of the Midwest’s biggest auto groups.

Read More →
Ad Loading...
2026 NADA Chairman Rob Cochran and outgoing chairman Thomas Castriota
Digitalby Hannah MitchellApril 1, 2026

New at the Wheel

2026 NADA Chairman Rob Cochran knows a thing or two about leadership after decades in the business. He brings an emphasis on stewardship to his new role at the head of the country’s major auto retail trade group.

Read More →
Hyundai steering wheel, black leather
Industryby Lauren LawrenceMarch 30, 2026

Hyundai Expands North American Footprint

Building on a previously announced $26 billion U.S. investment, Hyundai said it will grow its North American lineup and U.S.-based production and parts sourcing.

Read More →
back seat of an SUV, cream colored leather, text Safety Reigns Supreme, F&I and Showroom logo
Industryby Lauren LawrenceMarch 25, 2026

Crash Avoidance is Top Priority

The Insurance Institute for Highway Safety awarded 63 vehicles for safety, and SUVs lead the picks with more than half of the base and Pick+ awards.

Read More →
Ad Loading...
Photo of Toyota car parked in front of a Toyota dealership
Industryby Hannah MitchellMarch 23, 2026

2025 Dealership Buy-Sells a Record

The Kerrigan Index shows that despite a chaotic year of musical trade tariffs, high vehicle prices and more roadblocks, acquirers still flush with pandemic-era cash accelerated the consolidation pace.

Read More →