Dealer Confidence, M&A Momentum, and the Tesla Effect: Key Takeaways from NADA 2025

The 2025 NADA Show in New Orleans brought together industry leaders, including Haig Partners, to discuss the latest trends shaping the future of auto retail. Despite travel challenges, those who made it to the show were met with an electric atmosphere, reflective of a renewed optimism among dealers.

From elevated M&A activity to the changing regulatory landscape, key themes emerged that will shape the buy-sell market and broader auto retail industry in 2025.

A recap of the conversation is below. Click here to listen to the episode.

Dealer Sentiment is Up—And So Is M&A Activity

Before the recent election, dealers were facing declining new vehicle gross profits, creeping expenses, and concerns that profit levels would revert to pre-pandemic norms. However, the post-election outlook has reignited confidence, leading to a surge in dealership acquisitions and expansion plans.

At Haig Partners, we’re seeing strong demand from buyers, with full-price offers emerging quickly for franchises that previously garnered limited interest. This tells us that the shift in sentiment is real—dealers believe in the future of auto retail and are willing to invest.

Historically, the industry saw 300-350 transactions per year before the pandemic. That number peaked at 700+ in 2022 and settled at 500 in 2024. We anticipate a continued strong market in the 400-500 range, fueled by high blue sky values and a growing appetite for acquisitions.

The New Administration & Its Impact on Dealers

The political landscape always has ripple effects on the auto industry, and the 2025 inauguration was no exception. With the new administration expected to roll back some aggressive EV mandates, we could see less pressure on dealers in CARB states that were previously required to meet stringent zero-emission vehicle quotas. This would allow for a more gradual transition to advanced powertrains, ensuring that both dealers and consumers have greater flexibility in purchasing decisions.

However, potential new tariffs on imported vehicles and parts could pose affordability challenges. With 22% of all vehicles sold in the U.S. being manufactured in Mexico, China, Japan, or Europe, a 10-20% tariff increase could significantly raise consumer costs. Dealers and automakers will need to strategically navigate these economic shifts to remain competitive.

Elon Musk, Tesla, and the Evolution of Auto Retail

When asked about the most transformative figure in auto retail, Alan Haig highlighted Elon Musk, noting that while his impact may not be popular among franchise dealers, it has undeniably pushed the industry forward.

Musk’s impact on auto retail includes:

• Reinventing the direct-to-consumer model – forcing automakers and dealers to enhance their e-commerce capabilities.
• Pioneering EV innovation – pushing automakers to accelerate their own electric vehicle development.
• Challenging traditional manufacturing processes – Tesla has shortened product development timelines, putting pressure on legacy automakers to improve efficiency and reduce bureaucracy.

Tesla’s influence has led major dealer groups like Lithia to invest heavily in digital retailing, while brands such as Ford and GM are reevaluating how they market and sell EVs. However, dealerships still hold a major advantage—service.

Why dealers still have the upper hand:

• Tesla’s limited service infrastructure presents a challenge for customers.
• Dealers can offer a superior ownership experience with stronger customer service and support.
• Consumers still prefer to test-drive vehicles and interact with sales teams before making a purchase.

Competition breeds innovation, and as Haig pointed out, Tesla has forced traditional automakers and dealers to evolve—ultimately making the industry stronger.