New auto sales in Colorado showed strong annual gains during the first half of 2025, but the combination of the Trump administration’s enactment of tariffs and the ending of credits for electric vehicles is clouding the picture for the rest of the year. 

Statewide, overall sales were up just over 8% in the first six months compared to the same period last year, according to a recent report from the Colorado Auto Dealers Association (CADA). The same report noted almost 7% growth in new sales in the second quarter compared to the first.

In southern Colorado, which includes the Colorado Springs area, year-to-date new vehicle registrations increased just over 6%, according to the report. One local car dealer group shared that, this year, sales are up by about 5% compared to last.

Two of Colorado’s top five-selling new vehicles are electric, but with federal changes ahead, it’s open to debate if the sales strength of EVs is sustainable.   

The tariffs and threats of more has one CADA official concerned that car buying will become more difficult as consumers have less disposable income. Despite this, car dealers in Colorado Springs anticipate sales will increase in the year’s final six months. 

Even with federal incentives going away on Sept. 30, there is hope that EVs will remain a strong part of the market for the state’s car buyers. Buyers also are increasingly turning to hybrid vehicles, which have secured significant market share in Colorado’s car scene.

Ford dominance; Nissan upsets Tesla

At Phil Long dealerships in Colorado Springs, sales were up across  brands by 5% over the first six months this year, according to Kevin Shaughnessy, the group president and CEO. Phil Long-owned dealerships sell brands such as Ford, Hyundai, Honda, Kia, Subaru and Toyota, as well as luxury brands such as Audi, Mercedes-Benz and Lincoln. 

While sales are up, profit margins are down, he said, highlighting the need to offset affordability and inflationary pressures. 

“The trend here is that the ups and downs of the market from the news cycle, whether it’s tariffs, the economy interest rates, etc., all seem to be affecting new more than used,” Shaughnessy said. “Used is more stable. New is resilient and mostly improving on volume, but that’s been offset by deeper discounting.”

Statewide, used car sales are up slightly overall, according to  CADA. 

In Colorado Springs, tax collections from auto dealers were up 3.79% in July compared to the same time last year, according to the latest sales tax report, which reflects data from sales in June. In total, the city has collected $2.8 million in the first six months of the year, up from the $2.7 million collected last year. 

Though sales at Phil Long dealerships are up overall, there was no make leading the way, Shaughnessy said, adding that everything is “fairly evenly distributed” with sales increases seen “across the board.” 

Statewide, the top-five-selling brands in the first six months were Subaru, Nissan, Toyota, Ford and Mazda. Compared to last year, Nissan, Cadillac, Volvo, Hyundai and Ram saw the biggest percent increases in registrations, according to the CADA report.

No vehicle was able to compete with Ford’s F-series trucks, which saw a 14.5% increase in registrations compared to last year. Trucks have consistently been a top seller throughout the state, only occasionally yielding that spot, according to past CADA reports.

Small crossover SUVs, listed as a crossover utility vehicle (CUV), also have increased in popularity. 

CUVs captured more than a third of the new car registrations so far this year, dwarfing the 11% of passenger cars. They are still outperformed by light trucks, however, which account for more than half of the Colorado new vehicle market. 

“They’re also appealing for urban drivers because they get better gas mileage and they’re less expensive,” said CADA president and CEO Matthew Groves. “It would still drive like a car but it’s got the extra size, and it’s up a little bit so people feel like they’re in an SUV.” 

The best-selling subcompact SUV was the Subaru Crosstrek, according to CADA. When considering “light trucks” across the board however, the Crosstrek falls to fifth-best selling, behind the F-series trucks, Toyota RAV4, Nissan Airya and Tesla Model Y.

In the first six months of sales, the all-electric Ariya became the third-best-selling car in the state, pushing the Model Y into fourth place, CADA’s data showed.

Dealers cannot get enough of Ariyas, either. A local Nissan dealer had one arrive at 8 a.m. and it sold within four hours.

Varied tariff impact by model

The CADA report also found that as tariffs loomed earlier in the year, buyers, still dealing with the pent-up demand of the COVID-19 pandemic, opted to buy. Local dealerships saw the same trend. 

President Donald Trump imposed a 25% tariff on all imported vehicles and many car parts, which took hold April 3 and May 3, respectively. Kelly Blue Book reported vehicle MSRPs have risen for three straight months, but also found consumers are rarely paying the sticker price.

Still, there may be sticker shock ahead for potential buyers of some makes. This is because in addition to tariffs on imported cars, automakers who complete assembly of their vehicles in the U.S. may still face a tariff on imported components, according to Kelly Blue Book.

Buick, Hyundai and Kia may be the hardest hit by tariffs, according to a report by Insurify, an online tool that helps consumers compare insurance policies. Buick may see a 22% increase in the price of its new vehicles because many of its models are built outside of the U.S. 

In contrast, certain Jeep and Tesla models may see the lowest tariff-related price increases, according to Insurify. Tesla especially stands to be insulated as up to 70% of its popular Models Y and 3 are assembled in the U.S. 

Of the top-100-selling models in the U.S., which include the Toyota RAV4, Subaru Forester and the Mazda CX-5, 23 may see price increases due to the 25% import tariff. Those likely to be least affected will be the Dodge Durango, Honda Ridgeline, Tesla Model 3 and the Jeep Gladiator, according to Insurify.

But even as prices rise, consumers may not feel the pinch right away because automakers are temporarily eating the price of tariffs.

However, that’s not expected to be permanent. CADA’s  report projects new car registrations may decline by 1% by the end of the year. Last year, the state saw more than 222,000 new vehicle registrations, an increase over 2023, but by the end of this year, CADA believes there will be 219,900.

“When we are looking at the overall car market, the last six months have sort of defied the traditional laws of economics … Typically, as prices go up, demand shrinks,” CADA’s Groves said. “In this case, it’s consumer behavior changing as the economy evolves. They’re saying ‘regardless of what I have to pay, I still need to be from place to place and I will pay more to do it on my own terms.’”

Uncertain future of EVs

It’s possible EVs’ popularity may fade, despite Colorado, along with California, being considered “unicorns” in the market, Groves said.

“So, while we would still have a latent market to sell them, even without the credits, the fact that the manufacturers are hearing this news and they’re rebalancing their production, there’s going to be a lot less EVs to sell,” he said. “And so that’s going to contribute to the shrinking of the market.”

Not everyone is convinced, including Wilson Hitchings, the web administer for the EV Club of Colorado Springs. He cited the mechanical simplicity of EVs as one factor, and their sales model as another.

“Tesla, most notably, and others like Lucid and Rivian, are a direct sales model,” he said. “Buying an automobile is the most distasteful transaction people go through, so having the ability to just check boxes on a web page and have a car made to order is an enormous advantage of some brands of EVs.”

While consumers may prefer the online purchasing process, it may not be enough for companies like Rivian. Despite announcing a trio of new vehicles somewhat recently, and those being spotted on roads ahead of sales going live, Rivian is struggling financially. In its latest quarterly report, it revised its full-year earnings before interest, taxes, depreciation, and amortization to show a loss of between $2 and $2.25 billion.

Ford scaled back production of its F-150 Lightning electric truck last year, while the gas-powered version is consistently a top seller.

At Phil Long dealerships, Shaughnessy said the group saw an overall spike in sales in March and April, when tariffs were first announced, and are seeing more sales now. 

The state of Colorado appears to agree with Hitchings that EVs will persist.

State incentives, though not as large as the federal ones, will be staying said a spokesperson with the Colorado Energy Office.

“With these federal incentives going away soon, we encourage Coloradans who are looking at purchasing an EV to consider doing so before Oct. 1. That said, the state will continue to offer incentives after that date,” the spokesperson said.

While statewide sales of EVs have trended down for three of the past four quarters, CADA data shows, hybrids have seen sales increases in the same time period.

Shaughnessy believes this showcases how the public is now embracing electrification. Demand appears to be “organic,” he added, highlighting the lack of incentives for hybrids.  

Market share of hybrids, including plug-in models, stands at 19.1%, according to CADA. Battery electric vehicles account for 19.3% of the market share in year-to-date data.

The main difference between a plug-in hybrid vehicle and a “regular” hybrid is in the battery capacity, which can be 10 to 20 times larger for the plug-in hybrid, according to Car and Driver.

Gov. Jared Polis has a plan to have 940,000 EVs on Colorado roads by 2030. There were about 144,000 battery electric vehicles registered in the state as of Aug. 7, according to the Atlas EV Database, which pulls EV registration data from participating states. When looking at battery-powered EVs and plug-in hybrids combined, that statewide total jumps to almost 200,000.

More than 17,000 are registered in El Paso County.

This encourages members of the state energy office, especially as both segments are experiencing significant growth. Electric vehicles grew by 19%, hybrids by 13% and plug-in hybrids by about 6%. 

Though statewide new vehicle sales are up through the first half of the year, CADA worries that as tariffs bite, demand will slow. Sales at Phil Long do not support this worry, even with buyers defying “traditional” laws of economics. Phil Long dealers typically see stronger sales in the third and fourth quarters, and Shaughnessy expects that trend to continue.

“People always need cars. … When consumer demand stalls due to something like the concern over tariffs, we’re seeing manufacturers counter with strong offers and incentives like Ford’s ‘For America From America’ campaign where they offered employee pricing to the public and ignite demand even above normal levels,” he said. “The offers across all manufacturers are really strong right now. I expect that to continue through the rest of the year and beyond.”