The fate of new cars priced under $30,000

Ever since tariffs on imported automobiles were enacted at the beginning of April (and auto parts tariffs were announced for May 3), there have been countless forecasts speculating on the future of car pricing, production, and demand in the U.S.

Driving the news: One prediction that has taken root is that cars priced under $30,000 may not stick around for much longer—or at least—will be available in a limited capacity.

The reasons?

• According to analyses from Cox Automotive and Cars Commerce, 80% - 89% of vehicles in this market segment are produced outside of the U.S. and are subject to some level of tariffs. 

• And the Chevy Trax and Trailblazer, Nissan Sentra, and Honda H-RV are some of the most popular car models exposed.

As a result—automakers are faced with a few options. 

• Pass some, or all, added tariff costs to consumers in the form of price increases.

• Hold the line on pricing and eat margin losses.

• Or de-prioritize production of these cars (similar to the pandemic-era chip shortage). 

Why it matters: The $30K price point has long served as an entry ramp for first-time buyers and working-class households. If automakers pull back or raise prices too aggressively, they risk losing that customer altogether—and creating greater affordability gaps that won’t easily be rebuilt.

Between the lines: Any assumption that demand will follow prices upward is shaky at best. Some consumers are already under pressure—from elevated APRs, rising insurance premiums, and tighter credit approvals. Meaning—even small monthly payment bumps can have serious consequences.

Big picture: The sub-$30,000 new car isn’t dead, but it’s cornered. If OEMs raise prices too fast, they risk losing a large chunk of buyers. If they absorb the hit, margins take a beating. And if they cut production, they open the door for competitors—or used inventory—to fill the gap.

What we’re watching: Our bet is that automakers will likely do everything they can to localize more production to the U.S. as fast as they can, if they are able to.

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