By Ray Birch
CINCINNATI—The auto industry is in somewhat of “chaotic” state this year, with uncertainty being driven by more than just Trump tariffs, according to one automotive industry expert.
Scot Hall, EVP at Swapalease.com, told CUToday.info that the future of EVs is also making for an unpredictable year.
“Uncertainty stems from two sources: First, the Trump tariffs. And second, a different perspective when it comes EVs,” said Hall, noting that perspective change is being driven by the new Administration.
Hall emphasized the automotive market has faced various challenges over the years due to global factors.
“The new car market is currently experiencing a slowdown, influenced by multiple factors including tariffs,” he said. “The impact of tariffs on manufacturers varies, making it difficult to determine their overall effect. Interest rates have remained flat, which does not support automotive sales, affecting both loans and leases.”
Last year, automotive industry sales ended close to 16,000,000 units.
“This year’s sales are expected to be slightly lower due to ongoing uncertainties and tariffs,” Hall reminded. “The rise in new car prices may lead people to hold onto their used cars longer, reducing the availability of used cars and potentially increasing their prices.”
Regarding electric vehicles, Hall said there are numerous incentives available, particularly for EV leases.
“The automotive industry is utilizing these incentives while they are still available. Presently, there are many attractive deals on EV leases,” he said.
Hall said EV leasing has been compelling, looking back at offers in Q3 2024.
“In my estimation the deals are even more compelling today,” said Hall. “Both GM and Ford have attractive lease options on most if not all their EV offerings. Tesla has many attractive leases available, too. And, while I have not checked recently, I suspect there are some deals for imported luxury leases, like Audi, BMW and Mercedes.”
No Surprise
Hall said the uptick in deals should not be surprising.
“Maybe manufacturers are doing their best to take advantage of the various EV tax incentives before they are likely eliminated,” said Hall. “Regardless, there are quite a few attractive EV lease offerings currently available. To be clear, there are no official change mandates at this point, but significant changes are likely.”
On the non-EV side, a slowdown in full size truck sales is also pushing leasing in some instances, Hall said.
“Ford is offering some attractive lease options on F-150s as a way of moving excess inventory,” he said.
Swapalease.com, a website that matches consumers who want to exit a lease early with people seeking a short-term lease, is seeing an increase in EV listings as more EVs are released, Hall said.
“This expansion is beneficial for the market,” Hall said. “Depending on the used car market trends this year, there might be an increase in lease buyouts alongside transfers. Leasing statistics from last year were in the lower to middle 20% range, and this trend is likely to continue. Tariffs could influence leasing positively by offering budget-friendly options to consumers.”
GM and Ford, along with Stellantis, represent major automakers, although GM and Ford manufacture a significant percentage of their vehicles overseas, Hall noted.
“For example, most Ford F-150 trucks are built in the United States, which is advantageous for Ford,” Hall pointed out. “In contrast, a considerable portion of Chevrolet Silverado trucks are manufactured in Mexico, potentially posing a competitive disadvantage for GM. It will be interesting to observe the truck market dynamics, especially since the Ford F-150 was recently surpassed in sales by another vehicle, possibly the Toyota RAV4.”