Goldman Sachs has revised its projection for U.S. automobile sales downward by close to 1 million units this year due to President Donald Trump's tariffs, which are causing an increase in vehicle purchase costs. While Trump has temporarily halted reciprocal tariffs with countries (excluding China) for 90 days, tariffs on autos, steel, and aluminum remain unchanged, raising concerns about higher expenses for the automotive industry.

Goldman Sachs analysts led by Mark Delaney stated that the proposed tariffs could raise the costs of importing and manufacturing vehicles in the U.S. by several thousand dollars per vehicle. Passing on these additional costs to customers will be challenging for the auto industry, especially given weakening demand.

The investment bank predicts that new vehicle prices in the U.S. will likely increase by $2,000 to $4,000 in the next 6-12 months to account for tariff-related expenses. Goldman Sachs now anticipates U.S. auto sales of 15.40 million units in 2025, down from the previous forecast of 16.25 million units, and lowered estimates for 2026 sales by 1.1 million units to 15.25 million.

Furthermore, the bank has reduced its global auto production estimate for this year to 88.7 million units from 90.4 million and revised its 2026 production estimate to 90.7 million units from 92.6 million units.

Goldman Sachs downgraded its rating on Ford's shares to 'neutral' from 'buy', citing fierce international competition, weak consumer demand, and increased costs due to tariffs. Ford recently announced discounts on various models to boost sales before implementing price hikes, leveraging its strong inventory exceeding the industry average.

In response to these developments, Ford shares dropped around 5% in morning trading, while GM saw a decline of 5.2% and Stellantis slumped 11.8% in the U.S.