More EVs and a Buyer-Friendly New
Car Market — But Tariff Jitters Loom

February may be the shortest month of the year, but it wasn’t short on major developments in the auto industry. From the continued expansion of electric vehicles (EVs) to shifting trends in the used car market and looming tariff uncertainties, here’s a look at what shaped the automotive landscape last month.

Tariffs Loom Over the Auto Industry

If there’s one thing automakers and car shoppers alike are keeping an eye on, it’s tariffs and shifting import trends—and it’s already affecting how people shop. While prices and supply seem relatively stable for now, the landscape is changing fast. Mexican imports—historically the largest source of U.S. vehicle imports—are dropping rapidly, with dealer inventory of imports down 21% for RAM, 16% for VW, and 13% for Honda month-over-month as automakers sell down excess inventory of slower-selling models. Meanwhile, Canadian imported inventory ticked up (+1.8% MoM), thanks to increased production of models like the Dodge Charger Daytona and Lexus RX/NX. If you take out the discontinued Ford Edge, inventory of Canadian imports actually rose 3.7% MoM.

Then there’s China, where tariffs just doubled. The tariff on Chinese-built vehicles jumped to 20% on March 4, following the 10% increase in February. That’s hitting models like the Buick Envision and Lincoln Nautilus hard, which together make up 98% of all dealer inventory imported from China. 

As for the proposed 25% tariffs on Canada and Mexico, they’re on pause—for now. USMCA-compliant imports have a temporary reprieve as negotiations continue, but if these tariffs go into effect, it would significantly increase costs for 22% of new vehicle inventory.

And shoppers are taking notice. Searches on Cars.com spiked in the second half of February, jumping 9% week-over-week from February 16-22—likely triggered by rising tariff concerns. The initial announcement in early February didn’t seem to register immediately, but as the conversation expanded to tariffs on all imports and a delay to April, more shoppers started considering moving up their purchase timelines.

The good news? Dealerships have inventory on the lot right now that was already priced before any new tariffs, and it takes time for automakers to factor in higher costs on new shipments. Slow-selling models, like certain EVs or niche SUVs, could take even longer to reflect price increases. So even if these tariffs go into effect in April, car shoppers may not see big price hikes immediately—but by late spring or summer, expect higher prices across the board.
 

The New Car Market: More Inventory, Less Competition

Shoppers looking for a new car in February likely found the experience easier. New-car searches were down 7.2% YoY, but that’s not necessarily bad news—it means there’s less competition, and buyers are having an easier time finding the car they want.

Inventory grew 8% YoY, giving shoppers more choices. Some automakers, including Ford (+24% inventory YoY), Hyundai (+32%), Chevrolet (+16%), Kia (+28%), and Honda (+9%), have been increasing supply. However, brands like Dodge (-70% YoY), Jeep (-15%), Lexus (-26%), RAM (-20%), and Volkswagen (-4%) have been scaling back.

Meanwhile, prices have remained steady at around $49,000 for the past 17 months, though they dipped slightly (-1.5%) in the past two months. More affordable trims are being introduced, and incentive spending per new vehicle is up 20% YoY, helping to soften prices.

The Used Car Market: Prices Easing, but Low-Mileage Cars Are in Demand

If you’re shopping for a used car, there’s good news—prices are trending downward. The average used car price dipped -0.8% YoY, bringing it to $28,479, as supply remains stable. However, low-mileage vehicles are becoming more desirable and harder to find, with prices on cars under 40,000 miles increasing 1.1% YoY.

Why? The availability of late-model used cars is shrinking, thanks to fewer new vehicle sales in previous years. In fact, the supply of 0-6-year-old used cars is expected to drop 6.7% in 2025, making those newer, low-mileage used cars more valuable.

For bargain hunters, higher-mileage used cars are seeing price declines, making them a solid option for those looking for the best deal. If you’re looking for something newer with lower miles, be prepared to pay a little more—or act fast before inventory gets even tighter.

Hybrid Vehicles: The “Just Right” Solution?

Hybrid vehicles are the fastest-growing powertrain by inventory. Automakers are increasingly leaning on hybrids as a bridge to full electrification, balancing affordability, fuel efficiency, and reduced emissions without requiring charging infrastructure.

Among the hottest hybrid models:

• Toyota Land Cruiser (11% of new hybrid searches) – A revived nameplate with a standard hybrid powertrain.
• Toyota Camry (9%) – Now standard with a hybrid powertrain, offering an affordable alternative to SUVs.
• Honda Civic Hybrid (4%) – Back for 2025, offering hybrid efficiency in a compact package.

As EV demand fluctuates and tariffs remain uncertain, hybrids may be the “just right” solution for many consumers, combining lower costs with improved efficiency.

EVs Keep Expanding—But Consumers Have More Choices Than Ever

The EV market continued its upward trajectory in February, with EV inventory growing 16% year-over-year (YoY) and shoppers now able to choose from 69 different models, up from 49 last year—a massive 41% increase. While searches for new EVs surged 25% YoY, incentives and tax credits are likely pulling demand forward as consumers try to take advantage of deals before potential policy changes.

More affordable EVs are also on the way, with models like the Toyota bZ3X and Kia EV3 entering the market at around $40,000 before tax credits and incentives. Meanwhile, Ford and Volkswagen have been aggressively discounting their EVs, helping drive faster sales. The takeaway? EVs are more available than ever, and competition among automakers is heating up.

The used EV market has exploded, with inventory up 24% YoY in February, and while searches are up 12% YoY, demand has taken a more nuanced turn. Searches for used Teslas are down -16% month-over-month (MoM) and -7% YoY, signaling that consumers are now exploring a wider variety of used EVs, with 76 different models to choose from—up from 58 last year.

Electric trucks are stealing the spotlight in the used market. The Ford F-150 Lightning, Tesla Cybertruck, and Rivian R1T ranked 7th, 9th, and 12th in popularity among used EV searches relative to available inventory. However, these trucks don’t come cheap—their average price sits at $62,733, compared to $31,891 for other popular used EVs.

Meanwhile, BMW’s i4 and i5 models are flooding the used market, boosting overall used EV inventory and raising the average used EV price by $841. Still, despite more availability, used EV prices have dropped -6% YoY, with Tesla leading that charge with a -13% price decline.

Final Thoughts: More Choices, More Deals, and a Market in Transition

The auto industry is in the middle of a shift. EVs are more available than ever, and shoppers now have more choices beyond Tesla—both new and used. New car inventory is improving, making it easier for buyers to find a vehicle without as much competition. Meanwhile, tariffs could shake up the market, making affordability an even bigger factor in the coming months.