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Courts axe FTC CARS rule, Trump confirms tariff plans, VW cancels ID.7 for U.S. markets

Go deeper: 5 min. read

February 01, 2025

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Hey, everyone. Toyota’s only widely available EV, the bZ4X, starts at $37,000—

But almost no one purchases it outright.

Why? Simple—because it costs $272 *less* every month to lease one.

But the catch is—EV resale values have fallen sharply and automakers (or their finance arms) might take a loss when those leases end.

— CDG

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Welcome to The Weekly, your go-to roundup of the top five auto industry headlines of the week. Let’s dive in.

1. Courts vacate FTC CARS rule after NADA, TADA challenge

The U.S. Fifth Circuit Court of Appeals has thrown out the FTC’s proposed Combatting Auto Retail Scams (CARS) rule, saying the agency skipped a key step in its own rulemaking process. 

  • The rule—meant to crack down on hidden fees and bait-and-switch pricing—would have forced dealers to get clear consent before tacking on extra charges like service contracts.

  • But dealer trade groups like NADA and TADA pushed back, arguing the FTC ignored procedures, and used flawed cost-benefit analysis to make its case.

  • The court agreed the agency didn’t follow protocol but dismissed other claims—noting the FTC's rulemaking was not arbitrary.

The FTC estimated the rule would save car buyers $3.4 billion a year, while dealers warned it would add tons of red tape and slow down the buying process significantly.

But with or without the CARS rule—consumers are feeling more positive about their finances and showing more interest in car shopping…

2. Car buyers upbeat on economy, auto market — survey

A Santander survey found recession fears have dropped 17 percentage points over the past year. 

  • Among those earning $50,000 to $148,000, 64% expect a stronger job market, and 60% believe inflation will improve. 

  • With those factors combined—76% of survey respondents say they expect to be in better financial shape this year.

And with that confidence, more consumers are eyeing a new car. Nearly half are considering a purchase in 2025, and a third say they plan to buy.

“When the consumer is in good shape because of a stable and strong labor market and seeing positive, income gains with inflation, moderating still some more, it effectively means that, the consumer's financial health is improving, and that's good for vehicle demand, that's good for credit performance, and those things become a virtuous, cycle,” said Cox Auto Chief Economist Jonathan Smoke, speaking at AutoTeam America Summit.

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This is great news for dealers, but incoming policy changes add another layer of complexity…

3. Automotive groups brace for 25% tariffs on Mexico, Canada

President Donald Trump has announced a 25% tariff on auto imports from Mexico and Canada starting February 4—a move later confirmed by White House Press Secretary Karoline Leavitt on Friday.

  • Trump argues the tariffs will protect U.S. automakers, but critics warn they could disrupt North America’s tightly integrated supply chain.

  • Many vehicle parts cross borders multiple times before assembly, meaning tariffs could be applied repeatedly, driving up costs.

  • That could make cars—already near record-high prices—even more expensive for consumers.

The impact won’t stop there. Mexico and Canada could hit back with their own tariffs, with Mexican President Claudia Sheinbaum vowing to raise tariffs in response. That puts Detroit’s Big Three—GM, Ford, and Stellantis—at risk, as nearly half of all vehicles exported from Mexico come from those brands.

Even U.S.-assembled cars won’t be immune. Analysts say that almost every vehicle contains parts imported from Mexico and Canada.

But tariff policy isn’t the only change Trump is proposing for the auto industry. He’s also rolling back what he calls “EV mandates” and it’s forcing some automakers to pivot…

Dealerships that sell vehicles across state lines know out-of-state titling and registration can be a headache. That’s why DLRdmv created DLR50 – The nation’s fastest-growing interstate titling platform.

DLRdmv understands the impact these deals can have on your business. With DLR50, your dealership now has 24/7 portal access to calculations, pre-filled forms, checklists, inquiries, plus white glove processing and specialist support, DLR50 is a game-changer.

You can even acquire duplicate titles in all 50 states directly through the DLR50 platform! Out-of-state deals don’t have to be complicated! Let DLR50 simplify the entire process for you and your team.

DLRdmv – “The Dealer’s DMV”

4. VW's ID.7 canceled for U.S. dealers amid 'challenging EV climate'

The EV was originally set to launch in late 2024–-but delays and shifting market conditions put it on shaky ground. 

Volkswagen quietly removed the model from its U.S. website weeks ago—signaling trouble. And dealers shared concerns that the ID.7’s high price and sedan body style made it a tough sell in an SUV-driven market.

Now—broader forces are making the road even tougher for EVs. Within days of taking office, President Trump froze federal EV infrastructure funding and vowed to end consumer EV tax credits. While Congress will have the final say, the message is clear—government support for EVs is no longer a given.

For VW, this isn’t just about canceling one sedan. With profits under pressure and the EV market changing—the company now has to rethink what its electrification future really looks like.

The same goes for General Motors…

5. GM surges in EV market, but the road ahead isn’t easy

GM is kicking off 2025 with serious momentum in the EV space—selling a record 114,432 EVs in 2024.

The real highlight? A 125% jump in Q4 EV sales year-over-year, fueled by the Chevy Equinox EV, now one of the top five best-selling EVs in the U.S. Sales of the Blazer EV, Cadillac Lyriq, and GMC Hummer EV also surged, with both the Lyriq and Hummer posting their best quarters yet.

In fact—GM's rise in the EV market has been building—by early 2024, it surpassed Ford to become the second-largest EV seller in the U.S., behind only Tesla (by a wide gap).

But challenges remain. With federal EV tax credits set to expire for some models, demand could slow. And if it does, CEO Mary Barra made one thing clear—GM won’t hesitate to ramp up gas vehicle production instead.

Have a tip for our editorial team? Send us your scoop at [email protected].

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That’s a wrap for now – make sure you’re following along on X, LinkedIn and IG for more real-time updates.

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Thanks for reading. Hit reply and let me know if you found this week-in-review valuable or have any feedback. I’ll see you next weekend.

— CDG

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