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Well, as President Trump's tariffs continue to send shockwaves through the markets, autos are getting hit particularly hard, with 25% tariffs on all auto imports, in addition to reciprocal tariffs, all of which are taking effect today. For more, we're bringing in Kevin Roberts, Director of Industry Insights and Analytics at CarGurus. Kevin, it's good to see you. So, uh, let's take right into this, Kevin. We've got 25% tariffs on autos and auto parts from outside the US. So for these companies, their costs are going up, you can't eat all of that, so you're gonna pass some of that along to, to Kevin and Josh. I mean, one question I have, Kevin, is how much do you think prices could be going up here? I did see some analysts saying, listen, they're ballparking, you know, maybe five thousand, even ten thousand for, for the typical car. But does that dovetail with what you're thinking?

Yeah, so we put out some recent analysis yesterday and just kind of looking at kind of average prices across the board, uh, in the US ended March around $49,500. Uh, based on our analysis, average prices across the board can increase by about $3,000, getting close to $53,000. But it's important to keep in mind it's going to be highly dependent on where those vehicles are coming from. As you mentioned, there's certain kind of carve outs for US built vehicles, uh, USMCA compliant vehicles and then vehicles coming from non-North America are going to have very different rates. So that's kind of the blended average what we're looking at, but, you know, European cars might have higher prices, uh, compared to vehicles coming from Canada.

And broadly, Kevin, what has the afford- affordability been like even before these tariffs?

Yeah, so it's a really unfortunate time for these tariffs to be coming into the marketplace. Affordability was already an issue in the new vehicle market and we think tariffs are just going to further exacerbate this. So that analysis I was just talking about, we're expecting to see potentially 42% decline in vehicle's price under $30,000 and a 15% increase in vehicle's price over $50,000. So it's important to keep in mind that affordability's already been kind of a downward trend. In Q1 2020, about 37% of vehicles were priced under $30,000 and now, yeah, at the end of this past quarter, it was only about 13%. So affordability's already been an issue and tariffs are likely to further exacerbate that affordability issue for consumers.

So as as affordability already tough, now as prices go up, what, what does that mean for demand, Kevin? You know, I, I, I saw an analysis of Wedbush this morning, they were telling clients are estimating demand destruction of 15 to 20% in 2025 for new auto purchases. What do you make of that kind of estimate?

So we've already been kind of anticipating kind of declines in top market growth for new vehicles kind of going forward in a post-COVID environment. The market generally was like 17, 17 and a half million pre-COVID. That increase in vehicle prices we're already looking at, we already thought potentially took about a million, million and a half annual consumers out of the marketplace. It's still a little too early to say, uh, how demand is going to shake out. In fact, if we look at kind of sales rates post, uh, the US auto tariff announcement on March 26th, sales rates are really hot right now. Uh, as consumers are likely looking to get ahead of those tariffs and kind of take advantage of that pre-tariff inventory. So it's a little bit, a little bit too early to say right now. We're keeping an eye on what the modeling might look like, but right now market is, is exceedingly hot for new vehicle sales.

Kevin, I'm curious what you think, you know, these, these car companies, these car manufacturers, how they're react, how they're respond. You know, already I'm seeing res-, you know, reports, headlines, Stellantis, Kevin, pausing some production in Mexico and Canada, Volkswagen apparently halting rail shipments from Mexico, Ford is going to be, uh, offering employee pricing. What, what do you make of these moves, Kevin?

Yeah, so it's pretty interesting. It's an automaker by automaker kind of response to what we're seeing in the marketplace right now. So again, certain vehicles, particularly, uh, vehicles that may already have a large amount of supply, uh, in the US market, we're seeing, uh, production delays of those vehicles, which could make sense in the marketplace again, kind of wait and see. And then other automakers you mentioned Ford, uh, they already have 80 plus percent of their vehicle, uh, vehicles are built in the US. And so they may be able to kind of lean into this. So it's going to be an automaker by automaker situation where your vehicles are produced could be opportunities or challenges, uh, depending on the where that production is located.

Kevin, as always, great to have you on the show and help us think through all these dynamics. Appreciate it.

Absolutely, my pleasure.