It Makes No Sense Why U.S. Auto Sales Are Holding Steady, But They Are

Good morning! It's Friday, June 5, 2026, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's edition, all economic indicators say car sales should be collapsing, but they aren't. Still, German automakers are having a tough time because of the state of the market, Tesla is extending its Chinese-made EV sales, and Ford has issued yet another recall.

A logical person would look at everything going on with the auto industry right now — high interest rates, record-high prices, high inflation, high gas prices, tariffs, the unknowns of war and low consumer confidence — and probably come to the conclusion that sales are more likely than not in the toilet, but they'd be very wrong. For the most part, U.S. auto sales — despite everything — have been holding steady.

There's one big reason for that, according to analysts: Americans love spending money. No, I'm not joking, that's what they actually said. Of course, there's still a very good chance this could all go boom fairly soon. That's sort of the nature with these things, after all. From Automotive News:

"I think that the American consumer is going to be doing what they do best, and that's spend money," said Patrick Manzi, NADA's chief economist. "We're just in a unique industry here, and people love to buy cars."

Yet, there are "a lot of big macro indicators that aren't too hot," Manzi said.

Several key economic indicators are flashing warning signs: April's Consumer Price Index rose 3.8 percent year over year — the fastest inflation growth in three years — while the Conference Board's Consumer Confidence Index dipped roughly a percent in May, the Cox Automotive Dealer Sentiment future market index fell 16 percent from the first quarter, and slow hiring has left job seekers on the sidelines.

Still, May 2026 U.S. auto sales appear to be holding steady. S&P Global Mobility projects 1.44 million vehicles sold last month, down slightly from March and April but above the same volume from last year for the first time in seven months.

Judy Farcus Serra, COO and CFO at Headquarter Automotive, said she has seen a slight uptick in vehicle sales volumes, which she attributed to consumers coming back into the dealership after hesitating due to high prices.

Ultimately those buyers still need a car, she said.

There's an argument to be made that because of fundamental shifts in the auto industry following the pandemic, it has been largely insulated from the rest of the economy and other headwinds it could face. That's simply because the folks who are more susceptible to economic issues have already been priced out.

Transaction prices rose significantly during and after the pandemic, hikes driven by a mix of consumers upsizing vehicles, supply chain shortages, inventory constraints and more expensive electric vehicles.

The new-vehicle average transaction price exceeded $50,000 for the first time in September 2025.

"This has really been the shift," said Jessica Caldwell, head of insights at Edmunds. "The new-car market has eliminated a lot of buyers just from a pricing standpoint because we've seen prices rise so much in the past six years."

Those less flush with cash have moved on to used vehicles, she said, and therefore wealthier new car buyers "may not be feeling the pinch as much."

Well-heeled shoppers have money in the stock market, which has seen record growth driven by the artificial intelligence boom.

That being said, some contend that the auto industry is very much not an island, and light vehicle sales have closely tracked recessions. While the industry is certainly a bit more insulated than others, it's likely that if all the things I mentioned earlier keep up, cracks will begin to show and the dam will break.

While U.S. auto sales are doing rather well, German automakers like BMW, Mercedes-Benz and Volkswagen are sitting right at the front of the struggle bus. They've lost ground to competitors to start the year, thanks to tariffs, global conflicts, and technological back-and-forths, which have brought sales down. From Reuters:

"The entire German automotive industry is ​undergoing a profound structural transformation," EY sector specialist ‌Constantin ⁠Gall said, citing losses in key markets like the U.S. and China, costly overcapacity, high software investments and ​the slow ​ramp-up ⁠of electric mobility.

The Iran crisis adds to uncertainty, with higher ​fuel prices and inflation expected ​to ⁠dampen demand in Europe.

This means German carmakers can expect the decline to ⁠continue, ​Gall said, adding, "2026 will ​be another crisis year for the automotive industry."

Revenue generated by the world's major auto groups rose by 2% in the first quarter of 2026, with Japanese and U.S. manufacturers leading the way. At the same time, analysts found that German automakers saw a 4% retraction. Not great.

Before you all start freaking out in the comments, no, this isn't because you don't like the styling of these companies' latest batch of products.

Tesla is absolutely cranking out cars at its Shanghai, China, factory, and they're selling really well, too. Apparently, all it takes is CEO Elon Musk being sort of quiet for a few months to fix public opinion. I'll keep that in mind.

The Austin, Texas-based automaker saw new registrations rebound across several key markets in Europe in May — something we told you about earlier this week. It extended a recovery after earlier weakness in demand on the continent because of Musk's big mouth and far-right politics. From Reuters:

Meanwhile, BYD, maintained strong shipments to Europe ​and other markets, helping Tesla's biggest Chinese competitor end ​a losing streak of eight months globally and highlighting growing pressure ‌on ⁠foreign automakers.

Echoing a broader shift from price wars toward product differentiation and technology, BYD has doubled down on sharpening its technological edge, including a pledge last ​week to fully ​cover compensation ⁠and repairs for a year of accidents involving its City Navigation driver-assistance function.

Tesla, ​by contrast, is still awaiting regulatory approval ​in ⁠China to roll out its most advanced driver-assistance features, a delay that could weigh on its competitiveness as ⁠local ​rivals accelerate upgrades of smart ​driving capabilities.

In any case, Tesla's Chinese-made EV sales jumped 39.4% in May from the same time a year earlier, marking the seventh-straight month of growth as it held ground against its Chinese rivals. Deliveries of the Model 3 and Model Y, which included exports to Europe and other markets, hit 85,982 — up 8.2% from April.

We may have told you about a Ford recall just two days ago, but we've got another one in the can already! The Blue Oval is recalling 4,653 2022-2026 Bronco Sports and Mavericks and warning owners not to drive them because of a potentially incorrectly installed part that could result in the loss of steering control. Not good! Dealers are actually going to use a mobile delivery service to come to the owners' homes to check out the cars themselves. From The Detroit News:

The company says it may have improperly assembled the front lower control arm-to-steering knuckle ball joint. A partial connection can cause the ball joint to separate from the knuckle and create the loss of steering control, according to the recall. Dealers will inspect and repair the front lower control arm ball joints as necessary.

Ford isn't aware of any reports of accidents or injuries related to this condition, according to the recall, but the company looked at three similar warranty claims that contributed to the issuing of the inspection and repair notice.

Quality issues has been a focus for the Blue Oval in the past couple of years as recalls have piled up and weighed on balance sheets. The automaker last year set a record for the number of recalls issued in a single year. After more hires in quality, a new system put in place and the leveraging of different technologies to catch problems earlier, executives say the vehicles coming off the line now are some of the best models produced by Ford, even as it pays for past mistakes.

This is now the 40th recall Ford has issued in 2026, according to data from the National Highway Traffic Safety Administration. No other automaker has more than 17. So far, 10,255,722 Fords have been impacted by recall. In 2025, Ford issued a record 153 recalls that impacted 12,930,719 vehicles. While I don't think we'll break the number of recalls this year, it's very likely we'll eclipse the total number of cars impacted.

History.com

You probably forgot about it, but Reagan's death on this day in 2004 completely took the wind out of the Killdozer's story. Anyway, if you want to learn more about the former U.S. president, head over to History.com.

How about we end the week with some more good gas price news  They've continued to come down, though they're still nowhere near where they were before the U.S. and Israel's war with Iran broke out at the end of February. Still, WTI Crude Oil futures and Brent Crude prices are also holding steady at slightly lower prices, currently sitting at $91 and $94, respectively, at the time of publication.

Here's where national average prices stand right now, according to AAA:

AAA

What this all means is that the average price of a gallon of regular gas dropped another 2 cents overnight, so it's currently sitting at $4.22, according to AAA. We're now down 34 cents from the 2026 record that was set back on May 21, when gas hit $4.56 per gallon.

It's Game 2 of the NBA Finals, and YOUR New York Knicks have the chance to go up 2-0 against the San Antonio Spurs. I won't be crestfallen if they lose, because splitting the first two games was always the goal, but I'm feeling greedy. Also Jalen Brunson is my sun, my stars, my moon, and my whole world.

So, go New York, go New York, go.