Tariffs and Expiring Federal EV Tax Credits Fuel Affordability Challenges in Auto After H1 Sales Boom, According to Cars Commerce's Industry Insights Report

Core Insights - Federal policy shifts are significantly impacting the new and used car market, with consumer demand data from over 29 million shoppers and vehicle supply data from millions of vehicles informing the analysis [1] Pricing Trends - Imported vehicle prices have risen, particularly from the U.K. with an increase of over $10,000, while prices for U.S.-built vehicles have dropped by nearly $200 on average [2][3] - Average new vehicle prices have increased slightly by just under $100 since January [2] Market Segmentation - The entry-level vehicle segment, priced under $30,000, has seen a significant decline in market share from 38% in 2019 to an average of 13.6% in the first half of 2025, largely due to tariffs affecting foreign-built vehicles [4] - The mid-range new car segment ($30,000 to $49,000) accounts for nearly half of all inventory, with 50% of these vehicles being imported [5] Electric Vehicle (EV) Market - The average price of new electric vehicles is $65,000, with the federal EV tax credit of up to $7,500 for new vehicles set to expire soon, influencing purchase decisions for 48% of current EV shoppers [6] - 53% of current EV owners cited the tax credit as a primary reason for their purchase [6] Used Vehicle Market Dynamics - Used car prices rose nearly 3% in the first half of 2025, driven by increased inventory from trade-ins during a surge in new car buying [7] - The average time used vehicles spend on dealer lots has decreased by nearly 5% year over year, indicating a faster turnover rate [7]