New light-vehicle sales in February 2025 reached a SAAR of 16.0 million units, an increase of 2.1% compared to February 2024. According to Wards Intelligence, retail sales were estimated to reach just over 1 million units this February, an increase of 8.7% year over year, while fleet volume should total 210,000 units, representing a year-over-year decline of 16.3%.

Sales of battery electric vehicles (BEV) increased year over year through February, totaling nearly 185,922 units, an increase of 18.8% year over year. Conventional hybrids sales also were up significantly, totaling 274,189 units, an increase of 38.6%. Hybrids have consistently seen the highest sales and market share growth among alternative-fuel vehicles.

Vehicle affordability continues to be a challenge for the industry. According to J.D. Power, the average monthly payment on a new-vehicle finance contract was $738 in February, an increase of $17 year over year and the highest on record for any February. As payments continue to rise, the average interest rates have not declined meaningfully either. J.D. Power estimates that the average interest on a new-vehicle finance contract was 6.8%, a decline of only 3 basis points year over year. 

As of the release of this report, the 25% tariff on automotive imports from Canada and Mexico have been granted a one month exemption. Should they go into effect, we expect that no vehicle sold in the U.S. will be immune from these tariffs, as even the most “American-made” vehicles have a maximum 75% content originating in the U.S/Canada and vehicle components will be tariffed along with finished vehicles. The U.S. and Canadian auto industries are so intertwined, that even in the official data from the National Highway Traffic Safety Administration it is virtually impossible to distinguish the parts content between the two countries. Estimates on the impact on vehicle prices range from $4,000 to $12,000 per vehicle, according to a recent study from Anderson Economic Group. Whether or not vehicles meeting current USMCA content requirements will be exempt from tariffs also remains unclear. It is still too soon to know the exact effects on vehicle pricing and volumes, but the team at NADA is following this issue closely.

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