March 2025 brought a rare moment of respite for the US automotive market ahead of anticipated price hikes due to the Trump administration’s new tariff policies. As a result, both new and used car prices saw a slight dip in March compared to February 2025. The average price in this market was also just under 1% higher than the same period in 2024.
This is a temporary win for consumers, but it won’t last. Once dealers sell their “pre-tax” inventory, the US auto market is likely to transform.
Data from Cox Automotive reveals that the average monthly transaction price of new vehicles in the US last month was $47,462, a slight decrease from February’s $47,577. Interestingly, the price gap between internal combustion engine (ICE) vehicles and electric vehicles (EVs) is growing. This contradicts the theory that EVs are approaching price parity with conventional gas and diesel vehicles.
Estimates show that the average transaction price of a new EV in the US in March 2025 was $59,205, a 7% increase from the previous year and higher than February’s $57,015. Part of the reason is the rise in Tesla prices, with an estimated average of $54,582. The average price of Tesla EVs has increased by 3.5% year-over-year and 4.5% from February.
The average prices of several other car brands also increased in March. For instance, Land Rover’s average price for the month reached $107,129, an 8.8% jump from February’s $98,478, and a 6.1% increase year-over-year. Lincoln and Mitsubishi also recorded price hikes of 4.7% and 4.3% from the previous month, reaching $68,281 and $31,692, respectively.
However, some automakers saw a decrease in their average prices in March 2025. For example, Cadillac’s average price dropped by 5% to $74,078. Jaguar decreased by 5.8% to $64,403, while Dodge and Infiniti fell by 2.6%, landing at $49,548 and $62,276, respectively.
Cox Automotive data also indicates that auto sales across the entire US market surged in March 2025, even though prices and incentives generally remained stable. It is estimated that Americans purchased approximately 1.59 million new vehicles last month. If accurate, this would be the highest-selling month in nearly four years, a 30% increase from February.
Americans rush to buy cars to avoid new import taxes.
The reason is simple: many consumers are taking advantage of the current situation to buy cars before the new auto import tariffs take effect and push up prices across the market.
“All signs point to rising prices this summer when pre-tax inventory dries up and is replaced by taxed inventory,” said senior analyst Erin Keating of Cox Automotive. “The exact price increase will depend on the automaker, as each brand will handle pricing differently. If the White House policy remains in place, our group predicts that vehicles directly impacted by the 25% tariff could see price increases of 10-15%.”
Cox Automotive also reported a 30% increase in online traffic on both of their automotive websites, Kelley Blue Book and Autotrader.com, from the announcement of the new tariffs (April 2) to April 7, compared to the same period last year. Additionally, the websites they operate for hundreds of individual dealerships across the US recorded an average 20% increase in traffic.
Furthermore, searches for popular import brands like Toyota, Honda, Hyundai, and Volkswagen were two to four times higher than domestic brands such as Chevrolet, Ford, Jeep, and Dodge. Interestingly, many foreign-branded vehicles are actually manufactured in US plants, while some models of American brands are assembled in Canada and Mexico.
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