A Crummy Economy Is Seriously Sinking Car Sales

Good morning! It’s Tuesday, December 2, 2025 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Today we’re looking at slacking car sales amid consumer uncertainty, how the EV wars in China are benefiting Tesla, Trump letting a Ponzi scheme-like crime boss off the hook, the delicate tariff tango happening to South Korea and more. 

Car companies depend on the kind of growth only a cancer cell usually enjoys, but that isn’t happening this year. Our friends at Cox Automotive told the Detroit Free Press car sales were down 1% in November over October and down a staggering 7.8% over last year. JD Power had slightly different numbers, but the news is still not good: a 4.8% decrease this November over November 2024. From the Freep: 

“Affordability remains a critical concern, and the November sales decrease reflects a market affected by higher prices and slowing EV sales,” Mark Schirmer, Cox Automotive’s spokesman, wrote in an email.

All of this is a sharp U-Turn on the road to prosperity the auto industry was traveling at the start of the year. That was when many analysts forecast modest growth in U.S. auto sales for 2025. Cox Automotive said on Jan. 26 that new vehicles sales would reach 16.3 million by year’s end, stating that “positive economic” conditions combined with “improved buying conditions should lead to a 2%-3% gain” over 2024 total sales.

The cause? An economy it is hard to have faith in and, of course, tariffs. And the affordability crisis shows no signs of slowing down. J.P. Morgan Global Research estimated back in September that automakers will be serve up $41 billion in tariff costs, leading to a 3% rise in already steep new car prices. 

Reminder: the average cost of a new car was $38,000 just five years ago. The average cost now tops out at $50,000. Prices were already ridiculous and tariffs are doing consumers and automakers exactly zero favors. Monthly payments are also up 1.2% to $766 a month, a 16-month high, and seven year car loans are increasingly the norm. Part of the slow down is the collapse of the EV market following the end of the $7,500 EV tax credit–a ploy from the Trump administration meant to drop car prices, somehow. So it goes. 

Norway isn’t the only country that is still buying Teslas. The American EV automaker saw another sales rise in China. It seems Elon Musk’s cash cow is eating a little bit of BYD’s hay, as the Chinese automaker saw a comparable drop in sales for the third month in a row. Sales of Tesla’s domestically manufactured Chinese car saw an almost 10% rise year over year, according to Reuters. 

BYD, meanwhile, saw a 5.3% drop over sales from this time last year, Bloomberg reports. Now it’s not exactly like Tesla is taking all of that marketshare; Tesla sold almost 90,000 cars in China last month while BYD still enjoyed 480,186 sales, but it’s a worrisome trend for the world’s largest EV manufacturer especially as the end of the year is supposed to be the busy season for China’s car market. Bloomberg reports the drop in sales is likely due to customer fatigue with the brands offerings: 

It’s also a potential sign of consumer fatigue with BYD’s offerings. The company is facing an erosion of market share in both the mass-market and more premium segments, particularly from Geely Automobile Holdings Ltd.’s revitalized lineup and and Xiaomi Corp.’s hit models such as the YU7.

Overall sales for BYD now needs to sell about 418,000 units in December to meet its reportedly adjusted full-year target of 4.6 million. Profits have plunged in back-to-back quarters as the company found itself at the center of China’s efforts to rein in the sprawling EV industry — including a crackdown on the aggressive discounting that has underpinned BYD’s sales.

If boring, out-of-date, played out products kills sales this quickly in China, I wouldn’t worry about Tesla too much if I were BYD. It’s the domestic manufacturers that seem to have the giant’s sales in their sights. 

It’s a stirring indication of just how boring President Donald Trump’s clemency toward criminals has gotten when a Ponzi-like scheme that defrauded investors of an estimate $1.6 billion only makes it to gear 3 on The Morning Shift. From Automotive News: 

President Donald Trump has commuted the seven-year sentence of former GPB Capital Holdings CEO David Gentile, with a White House official on Nov. 30 countering the claims at trial brought by the Biden administration that led to Gentile’s conviction last year.

Gentile was convicted of a Ponzi-like fraud scheme that is alleged to have put almost $1.6 billion of investor funds at risk.

Founded in 2013, GPB Capital Holdings used investor funds to take stakes in automotive, retail and other types of companies. It paid out regular annual distributions to investors from returns on these holdings.

GPB Capital held dozens of car dealerships and was once one of the largest privately owned dealership conglomerates in the country. CEO David Gentile was sentenced to seven years in prison for his part of the scheme, but only served a few days thanks to Trump. Gentile’s co-defendant, Jeffry Schneider, received no such clemency and is serving a six-year term. 

I bet those 10,000 defrauded investors wish they had friends in high places like Gentile. Everyone is staying extremely hush-hush on the commuted sentence, according to the New York Times, but the White House did give a reason for giving Gentile this huge break: Gentile told folks in the fine print that investor capital might be used to pay distributions. Apparently it’s not really a crime, if you say the criminal activity you’re doing out loud? Meanwhile the victims are just average working people who lost their life savings in the scheme. One man told the Times he is now living paycheck to paycheck. It’s all about who you know, folks! 

Korea probably isn’t exactly happy with a newly cemented 15% tariff rate, but it’s a lot better than the 25% rate that has been stinking up its imports since earlier this year. The U.S. also made some more significant roll-backs in how imports from the peninsula are treated thanks to movement in the country’s legislator to invest in the U.S., from Reuters: 

In a statement posted on X, Lutnick said that the move unlocks the “full benefit” of South Korea’s trade deal with President Donald Trump.

“In response, the US will lower certain tariffs under the deal – including auto tariffs – to 15%, effective Nov 1.

“We are also removing tariffs on airplane parts and will ‘un-stack’ Korea’s reciprocal rate to match Japan and the EU,” he said.

The bilateral trade deal also caps any future national security tariffs on semiconductors and pharmaceuticals at 15%, putting South Korea on an equal footing with key Asian rivals Japan and Taiwan.

Of course, none of this might matter if the U.S. Supreme Court overturns the the International Emergency Economic Powers Act-based tariffs. I am just so tired of winning. Or maybe I’m just tired. 

Whether you’re grateful to only go once or dread seeing that green and white sign through your windshield for the third time that day, we stan O’Reilly Auto Parts. 

This song also came out today 34 years ago today!