We’re About To Find Out Just How Much Tariffs Screwed The New Car Market

I’ve been refreshing Ford’s investor relations page all morning in hopes that it would reveal the June sales release before publishing The Morning Dump. Ford, unlike many other companies, releases its sales data on a monthly basis, allowing a deeper view of exactly when the tariff-related panic buying started.

“Tariff-related panic buying” isn’t a dig at buyers. Sometimes panic is an entirely rational response to external stimuli, and, in this case, I don’t think the concern is unjustified. My first take from the data? It seems like buying is starting to level off for many automakers — a trend that isn’t going to be seen in Q2 quarterly reports later this week, but there are some outliers.

Politics and cars continue to merge and, overnight, President Trump and his frenemy Elon Musk have turned on one another again, this time with Trump threatening to “DOGE” all of Musk’s businesses. The disagreement is over federal spending, and Musk isn’t alone in trying to play to all sides. One of the House’s most conservative members reportedly reached out quietly to the White House to ask for funding for an EV plant in her own district, while generally being opposed to the idea of green tax credits.

Is there some good news? There’s gotta be some good news. Japan is going to start digging in the ocean for Rare Earths which, if it works, would give automakers a source for them that isn’t centered in China.

Ford Sales Way Up In June, Hyundai And Kia A Little Less So

This comes up every month, but most automakers only report quarterly sales these days, making trends a little harder to track until we get registration data, which lags by a few weeks. This means I have to make some broader assumptions in real time based on the data I can get. By the end of the week we’ll have sales/delivery numbers from all automakers from the quarter, but those numbers will not be particularly helpful.

Why? Because the introduction of confusing, randomly applied tariffs on automakers has caused worried buyers to rush into the market early. These buyers are “pulled forward,” meaning that they bought cars earlier than they would have in the absence of the tariff threat. This means the first half of the year sales, as measured by both deliveries and SAAR (seasonally adjusted selling), will look quite good.

A lot of those transactions will be in April and May, as J.D. Power, for instance, estimated that about 173,000 extra vehicles were sold in just March and April because of buyers who were pulled forward. This is a cloudy June because there were three fewer selling days this year, but last June was the start of the CDK Global cyber attack. I’m going to pretend like that cancels out, because that’s the easiest way to look at the data.

Who is killing it? Ford. The automaker made the decision early on to hold the line on prices in Q2 while also offering more incentives in the form of employee pricing. Ford’s strategy here seems to be to try to grab as much market share as possible at the expense of margin, though a lot of sales are coming from highly profitable trucks (the Bronco continues to be a killer, and my guess is that the Bronco beat the Wrangler this quarter). When Ford posts its Q2 quarterly earnings, it’ll be easier to determine how well Ford balanced expansion with profitability.

At the same time, Ford might be the outlier here.

Kia saw record first-half sales this year, reaching 416,511 vehicles through the end of June. In June? Sales dropped slightly from 65,929 vehicles in June of 2024 to 63,849 vehicles last month. That’s not a lot and could just be a reflection of fewer selling days, but it does point to pull-forward sales being slowed down at the very least. Similarly, Hyundai sales were up a little in June, but the pace has clearly slowed down.

When looking at SAAR estimates for June, the same pattern seems to be holding.

“Automakers and consumer alike continue to digest an uneasy and uncertain environment,” said Chris Hopson, principal analyst at S&P Global Mobility. “While we saw strong March and April sales levels, June brings a second consecutive month of milder pace for auto demand.”

This is also a warning. Big Q2 numbers from automakers don’t mean much if they fall flat in the second half, which is precisely when tariff costs will start being passed on (probably through lower incentives) to consumers at a faster rate. Even if all the tariffs magically go away, I’m not sure how many buyers are going to be left.

While the market hasn’t fully seen the impact of tariff buying, this all seems to be pointing towards a slow summer.

It Ain’t A Slow Summer In The Musk vs. Trump feud

Remember when President Trump and CEO of Tesla/SpaceX/X/The Boring Company/Frito-Lay (probably) were best friends? Me, neither. Lately, they’ve been going through rounds of saying terrible things about one another online, only to reach some sort of detente. We’re back at the threatening stage. Musk, for his part, is saying he’s going to start a third political party and primary everyone in Congress who supports Trump’s large budget/tax bill if the bill passes.

JUST IN: Elon Musk vows to make sure every member of Congress who campaigned on reducing gov spending but voted for the ‘Big, Beautiful Bill,’ loses their primary in 2026.

“They will lose their primary next year if it is the last thing I do on this Earth.” pic.twitter.com/vIxm5As48O

— Collin Rugg (@CollinRugg) June 30, 2025

Hmm… that would be exclusively Republicans at this point. Additionally, a third party formed by a right-wing figure tends to harm Republican candidates. How did the President respond?

Well, that’s not great.

There is no EV Mandate, it’s worth mentioning, but Republicans are just better at naming things than Democrats, so people believe things to be true that are, well, not. Specifically, subsidizing electric car sales and production is designed to keep America competitive in the future, not force people to buy electric cars. You could argue that President Biden’s CAFE increases and the CARB waiver amounted to a de facto EV mandate, but that’s not what Musk and President Trump are talking about here.

Either way, Tesla probably wants to keep all the incentives it can get, but Elon Musk has been repeatedly vocal about not wanting any subsidies for Tesla, especially if it means cutting off subsidies for all of his competitors. It’s a view that’s very much pull-up-the-ladder-behind-you.

I don’t know where this ends, but it looks like Republicans in the Senate are likely to pass the bill today and send it back to the House.

South Carolina Republican Wants EV Funds Unfrozen

@nbc

Me to my boss when this does numbers ???? Stream #parksandrec on @Peacock #monalisasaperstein #jeanralphio #moneyplease

♬ Money please__Parks_and_Rec__NBC – NBC

Perhaps less consistent on electrification and EV subsidies is Representative Nancy Mace, pictured above, a Republican from South Carolina. She is a major supporter of President Trump and someone you might imagine would be against money for plants being swapped over to building electric cars. There are a bunch of Republicans in the House who joined Democrats in opposing cuts to electrification. Was Representative Mace one of those Republicans? She was not, and voted for the House version of the latest budget/tax bill.

So it’s kind of amusing that Representative Mace, according to a letter obtained by The Washington Post, quietly asked President Trump to unfreeze funds for her district:

In a two-page letter to Energy Secretary Chris Wright, Mace asked the administration to disburse roughly $285 million for the Mercedes-Benz Vans plant northwest of Charleston, South Carolina, through a grant program approved as part of the Biden administration’s 2022 climate legislation. The grant money is part of a $1.8 billion program for shuttered or at-risk auto plants to manufacture electric vehicles and convert their supply chains.

The Trump administration has moved to withhold funding for former president Joe Biden’s climate programs and is also seeking to repeal hundreds of billions of dollars in federal clean energy incentives as part of the tax bill being debated by the Senate.

A spokesperson for Rep. Mace explains why this isn’t hypocrisy:

“Congresswoman Mace has always raised concerns about reckless federal spending. But once the money is out the door, she’s always fought to bring jobs and investment home to South Carolina. Congresswoman Mace has repeatedly stated South Carolina’s tax dollars matter just as much as anyone else’s,” Long said. “The $285 million grant tied to up to 800 jobs at Mercedez-Benz Vans plant in North Charleston is a major opportunity for South Carolina.”

I love the concept here that reckless spending is bad, but once everyone has agreed to said reckless spending, it would be silly not to take the money.

Japan Wants That Rare Earth Goodness

The ship pictured above is a drilling rig that has the ability to dig so deeply into the ocean area around Japan that it should be able to pull up mud rich with the kind of Rare Earth metals everyone is freaking out about lately.

Per Nikkei Asia:

The Japan Agency for Marine-Earth Science and Technology (JAMSTEC) will station the Chikyu, a deep-sea scientific drilling vessel, 100 to 150 kilometers from the coast of Minami-Torishima Island, a coral atoll about 1,950 km southeast of Tokyo.

A pipe will be lowered 5,500 meters below the ocean’s surface into the seafloor to collect 35 metric tons of mud. If successful, this would be the first time in the world a vessel has recovered rare earths from such depths.

The work, including the placement of the pipe, will likely take about three weeks, with the Chikyu vessel ferrying the mud back to Japan’s mainland. One ton of mud is expected to contain about 2 kilograms of rare earth minerals.

China is currently the biggest source of Rare Earth metals, and that’s causing some headaches for companies caught in a global trade war. If Japan can make this work, it could be a source of commercial rare earths as early as 2028.

What I’m Listening To While Writing TMD

You may have seen this coming. It’s Lana Del Rey doing “Summertime Sadness.”

The Big Question

How much will sales fall in Q3 of this year? Which automaker will thrive and who will sink?

Image: Depositphotos.com