Car Costs Climb Despite Rising Sales

American car buyers are paying record prices for new trucks and SUVs, but the companies selling them are absorbing a wave of new expenses. General Motors, Ford, and Stellantis all reported higher third-quarter revenues on Wednesday, yet they cautioned investors that rising input costs are squeezing margins. The average new vehicle transaction price reached just over $50,000 in September, a figure close to an all-time high according to Kelley Blue Book data.

Consumer demand remains strong for large vehicles. General Motors reported that light-duty truck sales rose 9% year over year. Stellantis saw U.S. pickup sales jump 34%. Ford’s F-Series continues to lead its lineup. These sales figures helped drive company-wide revenue increases of 2.9% for GM, 2% for Ford, and 1% for Stellantis.

Sherry Ann House, Ford’s chief financial officer, told investors on a conference call that customers remain resilient despite high fuel prices, interest rates, and inflation. She noted that while higher fuel costs impact freight and energy expenses, they have not yet dampened demand for trucks and fleet vehicles.

The primary challenge for manufacturers is the cost of materials. Tariffs on imported steel, aluminum, and copper have raised prices for essential components like frames and wiring. Computer memory chips, in high demand for both automotive electronics and artificial intelligence data centers, have also become more expensive. Paul Jacobson, GM’s CFO, stated that material and diesel costs could cost the company up to $2 billion this year.

Ford expects a similar year-over-year headwind of approximately $2 billion from commodities, memory, and logistics costs, according to CEO Jim Farley. Both companies are offsetting these expenses through growth in software services and parts. Stellantis executives indicated they would provide more detailed cost information in the fourth quarter.

Diesel fuel prices, hovering near $6.35 per gallon, add further pressure. This affects trucking costs for moving finished vehicles from factories to dealerships. It also increases the expense of moving parts across the U.S.-Canada border, where supply chains are deeply integrated and parts cross the line multiple times during assembly.

The industry is also navigating the aftermath of the federal electric vehicle tax credit, which expired on September 30, 2025. GM reported a 6% drop in third-quarter sales, partly attributed to a smaller EV market. Jacobson said GM is right-sizing its electric capacity to align with current demand, noting that high oil prices could eventually push EV penetration higher.

Ford executives highlighted their Fathom electric truck, which will open for pre-orders in early 2027 at a price under $30,000. Meanwhile, hybrid vehicle sales in the U.S. rose 27% over the past year, a trend automakers are now adjusting their product plans to accommodate. Sam Fiorani, a vice president at Auto Forecast Solutions, said the transition to fully electric vehicles will take longer than initially anticipated, forcing manufacturers to backtrack and develop more internal combustion models.

Tesla, which produces only electric vehicles, has reclaimed market share. It now accounts for almost 52% of new EV sales in the United States, according to Edmunds data. CEO Elon Musk spent little time discussing cars on the company’s earnings call, instead focusing on investments in robotaxis and humanoid robots. He also hinted at a potential merger between Tesla and his rocket company, SpaceX, though he noted shareholders would need to approve such a deal.