Auto sales in the US and Canada may decrease by 1.8 million units this year due to the trade war.

According to Reuters, Detroit-based automotive consulting firm Telemetry predicts that if the global trade war escalates further, auto sales in the US and Canada could decrease by 1.8 million units this year, and may even stagnate over the next decade.

On April 7, Telemetry stated in an exclusive report provided to Reuters that if the current tariff policies persist until 2035, light vehicle sales in the US and Canada would be approximately 7 million units lower than in a scenario without trade conflicts and with strong economic growth (i.e., 24.6 million units in sales).

US President Donald Trump's 25% tariff on imported vehicles took effect on April 3, forcing automakers to adjust their production layouts. For example, General Motors increased truck production at its Indiana plant, while Stellantis temporarily halted operations at two of its plants in Mexico and Canada, affecting five related US factories.

To alleviate consumer concerns that tariffs would increase vehicle prices, automakers including Ford Motor Company and Stellantis have enhanced car purchase incentives. Analysts predict that ongoing tariffs will raise the price of new cars in the US by thousands of dollars, a view shared by automakers.

Sam Abuelsamid, Vice President of Telemetry Insights, stated, "Vehicle prices are already a significant issue for consumers." Currently, the average price of a new car in the US is close to $50,000, and auto loan interest rates have also risen since the COVID-19 pandemic.

Abuelsamid believes, "Sales declines will lead to layoffs. Even if some production is shifted to the US, it will not be enough to offset job losses caused by rising costs and declining sales."

Although the growth rate of EV sales has slowed in recent years, Telemetry still expects that pure electric vehicles will become the most common automotive products globally within the next decade, with sales reaching 40.5 million units by then.

According to Telemetry's forecast, in a scenario without trade conflicts and with strong economic growth, pure EV sales in Canada and the US would reach 8.8 million units, especially as models like extended-range electric vehicles (EREVs) become increasingly popular.