2025 Midyear Market Outlook Report

Dave Cantin Group’s 2025 midyear market outlook report identifies affordability as the defining force driving every major auto industry trend this year​​

Top findings from the latest DCG report, produced in partnership with Kaiser Associates, include:

• Affordability is the defining force in the U.S. auto market in 2025
• The U.S. consumer is ready to buy Chinese cars, a readiness rooted in price pressure
• EVs are here to stay, and the market is maturing
• Auto dealers see healthy profits this year even as automakers suffer from tariff costs

NEW YORK, Aug. 20, 2025 – The new 2025 Market Outlook Report (MOR) midyear update from the Dave Cantin Group (DCG) and Kaiser Associates finds that affordability is not only the defining force in the U.S. auto market this year, but also the thread connecting the industry’s other most pressing trends.

The midyear 2025 report from DCG spotlights: consumers’ and dealers’ beliefs that Chinese automakers will inevitably enter the U.S. – and reports consumers are open to it; the maturing of the EV market as Tesla’s first-half fumble ceded ground to rivals; and a power shift favoring retailers as new U.S. tariffs hit automakers harder than their consumer outlets.

Dave Cantin Group, a leading advisor to retail automotive groups and their owners, publishes MOR semiannually, in partnership with Kaiser Associates, to deliver a comprehensive analysis and forecast of the automotive climate.

“Affordability is the dominant theme at the midpoint of 2025, and it has implications across nearly every other issue facing the automotive industry,” Dave Cantin Group President Brian Gordon said. “Affordability is reshaping purchase decisions, driving interest in cheaper Chinese vehicles, and making any manufacturer decision to pass on tariff costs to consumers virtually impossible without the risk of losing market share.”

While automakers grapple with tariffs, dealers have leveraged diversified revenue streams in parts, service, finance, insurance and used vehicles to post record profits.

“U.S. dealers are proving once again how resilient they are and how sophisticated their customer-focused business models have become,” Dave Cantin Group CEO Dave Cantin said. “Affordability challenges are forcing adaptation, and dealers are leading the way.”

Key 2025 Midyear Themes:

• Affordability Concerns Rewrite the Rules of the Road: After five years of rapid price growth and new tariffs threatening further inflation, consumers are staying in their favorite segments but scaling down – opting for smaller versions of trucks, SUVs and crossovers or lower trims to stay within budget. Automakers are responding by introducing value-focused models, expanding lower-end trims and absorbing tariff costs rather than risk losing share. Challenger brands like Buick and Mazda, which pair affordability with reliability, are seeing gains.
• Chinese Automakers’ Entry Seen as Inevitable: Forty percent of U.S. consumers say they would consider a Chinese-made vehicle, and 75% of dealers expect Chinese brands in the market within a year. This openness is rooted in price sensitivity, with buyers motivated by even modest savings over U.S., European, Korean or Japanese options. While large-scale entry in 2025 is unlikely, a controlled rollout under the Trump administration is plausible. Abroad, Chinese OEMs doubled EU market share in the first half of 2025, with sales up 91% year-over-year and BYD outselling Tesla in Europe for the first time in April.
• Tesla Stumbles, Rivals Rise in Maturing EV Market: Total U.S. EV sales hit a record 607,089 units in H1 2025, up 1.5% year-over-year, though Q2 volumes dipped 6.3%. Tesla remains dominant but saw its market share erode as GM’s EV sales surged 111%, driven by the affordable Chevrolet Equinox EV. Lucid and Nissan also posted gains. Affordability fueled a 32% year-over-year jump in used EV sales in May, with depreciation making them cheaper than comparable ICE used cars.
• Tariffs Slam Automakers, Dealers Thrive on a Playbook Full of Options: Automakers absorbed multi-billion-dollar tariff impacts in Q2 to protect sales in an already affordability-sensitive market, squeezing margins and limiting flexibility. Dealers, whose profits are less dependent on new-vehicle margins, are leveraging strong parts and service revenue, finance and insurance products, and used vehicle sales to project average profit margins of 4.7% in 2025, up from 4.1% in 2023. Sixty-one percent expect record revenue growth this year.

The 2025 Midyear MOR draws on proprietary consumer and dealer survey data, industry financial reporting and interviews with automotive leaders to provide a fact-based snapshot of the first half of the year and what to expect in the second half.

The full report, including detailed statistics, charts, and retail takeaways, is available here.