Vehicle Sales Are Up, But The Good Times May Be Over Soon

Good morning! It’s Wednesday, July 2, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re checking in on sales reports for the second quarter and where things could be heading. We’re also talking about Tesla’s win in China, the fact the VW ID Buzz is back on sale and a huge recall over at Chrysler.

It might be Wednesday, my dudes, but we’ve still got a busy one over here.

Vehicle sales in the U.S. rose in the second quarter of 2025 thanks to a renewed demand for gas-powered vehicles, but the industry doesn’t expect the good times to go on forever. More than likely, the second half of the year is going to be made rather bumpy as Presdient Trump’s tariff mess makes prices even higher.

General Motors saw sales rise 7% in the quarter because of cheaper crossovers like the Trax (which is excellent). That growth helped GM maintain its top sales spot in the country. It wasn’t the only company to see a rise, though. Ford reported a 14.2% quarterly sales increase, Hyundai Group was up 10% year over year and Toyota’s was up a solid 7.2%. A lot of these bumps can be attributed to buyers who wanted to snag a deal before it was too late. I’m sure these automakers are enjoying this moment of happiness, but it all could come crashing down rather soon. From Reuters:

The tariffs are expected to hit budget-friendly imported models, including Ford’s compact Maverick pickup and GM’s Trax, denting affordability concerns as the average new-vehicle price nears $50,000.

“Much of the pull-ahead demand that fired up sales in April and May has now been satiated, so consumer demand is expected to be weaker in the coming months,” said Charlie Chesbrough, senior economist at Cox Automotive.

Overall, U.S. new vehicle sales in June came in around the 1.25 million unit mark. That represents a seasonally adjusted annual rate of about 15.34 million vehicles. Not too shabby. However, once people start having to pay through the nose to cover some of the costs of Trump’s tariffs (because automakers aren’t going to swallow that money forever), you can probably expect vehicle sales in the third and fourth quarter of 2025 to look a hell of a lot different. 

Tesla seems to have caught at least a modicum of a break in China, as sales of its Shanghai-made vehicles were up 0.8% in June from a year earlier. That’s not exactly a huge number, but it’s pretty significant when you consider the fact that it snapped an eight-month losing streak in one of the world’s most important auto markets. It’s not all good news, though. The Austin, Texas-based automaker saw sales continue to fall on a quarterly basis. 

This is all happening as BYD — a Chinese EV giant — increased its year-over-year sales 11% to 377,628 vehicles in June. From Reuters:

Deliveries of Model 3 and Model Y vehicles made in its Shanghai factory, including both China sales and exports to Europe and other markets, rose 16.1% from May to 71,599 units, data from the China Passenger Car Association showed on Wednesday.

[…]

Tesla recorded the fastest-ever model ramp-up with just six weeks to full production of the refreshed Model Y in its largest manufacturing hub in Shanghai earlier this year.

But its sales in China and Europe have been cooling and mounting pressures from rivals and the political backlash against CEO Elon Musk are dragging on demand.

Sales of its China-made EVs in the April-June period slid 6.8% on-year, the third quarterly decline in a row.

Tesla’s China-made EVs accounted for 51.3% of its global deliveries in the first quarter.

The U.S. EV maker is expected to report another fall in global quarterly deliveries later on Wednesday.

When you look at 2025 as a whole, Tesla’s EV sales are expected to drop 10% this year to make up 13% of the global market. At the same time, BYD’s global EV sales are supposed to grow by 45% to a record high, and they’ll account for about one-fifth of the world’s total EV market.

Volkswagen has fixed a couple of sorta silly recalls that ended up halting sales and production of its ID Buzz electric minivan earlier this year. Under one of the recalls, the brake system warning light on the instrument panel could actually display as an incorrect symbol or color. The second recall was somehow even goofier — its third row of seats was too spacious for just two passengers. Both recalls covered 5,637 vehicles built in the U.S. and 771 more in Canada, built between September and February of 2025.

The gauge cluster recall took about a day to complete after a repair became available on June 6. The rear-seat recall is a bit of a strange fix. Dealers will install a fixed, unpadded trim part to the sides of the seats that limits the width of the seating surface in the third row for two passengers. From Automotive News:

The stop-sale orders applied to new, unsold ID Buzz vehicles as well as preowned inventory. ID Buzz sales began in November, meaning the retro-inspired vehicle had only been on sale for a few months before sales were paused, frustrating dealers.

U.S. sales of the ID Buzz totaled 1,162 in the fourth quarter and 1,901 in the first three months of 2025, the model’s first full quarter on sale.

I’m not going to sit here and lie to you that I think the ID Buzz is the best car on the market (or even really worth its asking price), but I am glad it’s back on sale. Despite my issues with it as a vehicle, I do love the way it looks.

Chrysler is recalling 208,668 Pacificas and 40,983 Voyagers built between the 2022 and 2025 model years because of improperly sealed airbags that could lead to a passenger ejection — something that is less than ideal. Additionally, 21,734 vans are being recalled in Canada and a further 403 must be checked in Mexico.

While this recall is wide-ranging, it’s expected that about 14% of the recalled cars will actually have the defect. Better safe than sorry. From Automotive News:

“An internal investigation revealed that certain vehicles may have been built with a side curtain airbag that may not maintain sufficient inflation pressure for the intended duration upon deployment. While the airbags will still deploy, the pressure may not reach the intended level, potentially compromising occupant protection in certain types of collisions,” the spokesperson said in a statement to Automotive News.

The defect could cause ejection of occupants through side windows in certain types of crashes, NHTSA said. The automaker was not aware of any injuries or accidents related to the defect.

Dealers were notified of the recall on June 24, and customers should expect their notification between June 30 and July 3. Once a remedy becomes available, they’ll get another letter, according to the National Highway Traffic Safety Administration. Owners will be able to take their Pacificas and Voyagers to a dealership to replace one or both of the curtain airbags as needed.

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There are few places I’d rather be than Ocean Avenue right now. It’s July. It’s the Summer. We’ve got a long weekend in a couple of days. Things are looking up.