Goldman Slashes U.S. Auto Sales Forecast by Nearly 1 Million

• Goldman Sachs reduced its 2025 U.S. auto sales forecast by nearly 1 million units to 15.40 million from 16.25 million, citing Trump’s tariffs increasing vehicle costs by $2,000 to $4,000 over the next 6-12 months, despite a 90-day tariff pause for most countries except China.
• The bank also cut its global auto production estimates to 88.7 million units for 2025 (from 90.4 million) and 90.7 million for 2026 (from 92.6 million), while lowering its 2026 U.S. sales projection by 1.1 million to 15.25 million due to ongoing tariff pressures.
• Goldman Sachs downgraded Ford’s stock rating to ‘Neutral’ from ‘Buy,’ highlighting tariff-related cost increases, softening demand, and fierce international competition as key challenges for the auto industry.

Goldman Sachs (GS) has slashed its U.S. auto sales forecast for 2025 by nearly 1 million units, dropping it to 15.40 million from 16.25 million, as President Donald Trump’s tariffs threaten to inflate vehicle costs despite a 90-day pause on reciprocal duties for most countries, excluding China. The bank’s analysts, led by Mark Delaney, estimate that tariffs will increase the cost of importing and manufacturing vehicles by a low to mid single-digit thousand-dollar amount, projecting net price hikes of $2,000 to $4,000 for new cars over the next 6-12 months. This comes amid concerns that the auto industry, already grappling with softening demand, will struggle to fully pass these costs onto consumers, squeezing margins in a competitive market.

The tariff impact extends beyond the U.S., prompting Goldman Sachs to revise its global auto production estimates downward to 88.7 million units for 2025, from 90.4 million, and to 90.7 million units for 2026, from 92.6 million. While Trump’s Wednesday announcement spared many countries from broader tariffs for 90 days, duties on autos, steel, and aluminum remain intact, driving up production expenses and clouding the outlook for an industry reliant on global supply chains. For 2026, the bank also cut its U.S. sales projection by 1.1 million units to 15.25 million, reflecting a prolonged ripple effect from these persistent cost pressures.

Goldman Sachs’ reassessment isn’t limited to numbers—it’s also adjusting its view on specific players, downgrading Ford’s (F) stock rating from ‘Buy’ to ‘Neutral’ due to heightened international competition, weakening consumer demand, and the tariff-induced cost burden. The $2,000 to $4,000 price surge per vehicle underscores a challenging road ahead for automakers, as Delaney’s team notes that absorbing these expenses without alienating buyers will test the sector’s resilience. With U.S. sales now pegged at 15.40 million for 2025 and global output at 88.7 million, Goldman Sachs signals a cautious stance on an industry caught between policy shifts and economic headwinds.

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