As the world’s largest General Motors dealer, Berkshire Hathaway Automotive finds itself at the epicenter of an industry grappling with new tariff uncertainties. Jeff Rachor, the company’s chief executive, is quick to acknowledge the pervasive anxiety generated by headline-grabbing policy moves. But in an interview during CNBC’s live broadcast of the 2025 Berkshire Hathaway annual meeting in Omaha, Mr. Rachor sounded a markedly measured note.

“These are exciting times in the automotive industry and the tariffs are certainly in the headlines every day,” Mr. Rachor said, addressing an audience eager for clues about the industry’s path forward. “But I would tell you, I wish I could give you absolute clarity on exactly how tariffs are going to manifest themselves. I can tell you what we’ve seen so far and the impact on our industry.”

Front-Loading Inventory and the FOMO Effect

In the weeks following the announcement of tariffs, Berkshire Hathaway Automotive has recorded an unmistakable surge in sales. The explanation, according to Mr. Rachor, is more straightforward than it might appear: consumers, bracing for a price shock once the tariffs hit, are moving quickly to purchase vehicles currently on dealer lots, none of which have been affected by the new levies.

“Inventories on our dealership lots today are obviously not burdened with tariffs,” he explained. “We’re enjoying a couple of months of FOMO out there as consumers rush to take advantage of these non-tariff cars and inventory.”

This “fear of missing out” isn’t new to the auto business, but Mr. Rachor drew a distinction between this latest demand spike and the pandemic-era buying frenzy. “This FOMO syndrome is different than what we saw during COVID,” he said. “It is much more temporary and fleeting.”

Industry data seem to bear him out. After a dramatic upswing in sales during March—when the seasonally adjusted annual rate (SAAR) reached 17.8 million—the market cooled a bit in April, with the SAAR easing to 17.3 million units. Rachor expects another month of elevated sales in May, “maybe in the mid to high 16s,” before normalization sets in. “We’re already seeing some of that surge in demand moderate,” he said.

The Pull-Ahead Dilemma

Yet for as long as front-loaded volumes benefit today’s sales numbers, they also present a challenge for future quarters—a so-called “pull-ahead” effect where tomorrow’s buyers purchase early to avoid imminent price hikes. Mr. Rachor views this as a manageable headwind, noting that business should “normalize over the next few months.”

“As vehicles become burdened with tariffs in the second half of the year, it’s likely there will be some offset to these strong sales that we’ve enjoyed the last couple of months,” he said. Industry experts had forecast a 16 to 16.5 million unit SAAR for 2025, and while the second quarter may wind up being the high-water mark for sales, Mr. Rachor remains optimistic. “For the full year, I would still guide to 16 to 16.2 million units,” he stated, suggesting any disruptions will be “lumpy,” but not catastrophic.

Mr. Rachor projects the supply of non-tariff-burdened vehicles will gradually dwindle over the third and fourth quarters, with full tariff effects not being reflected in inventory until late in Q3 and into Q4. For 2026, he suggested, this could establish a “new normal” in the marketplace, as inventories realign under the new trade regime.

Navigating an Affordability Squeeze

Tariffs are landing atop an existing affordability crisis, a theme Mr. Rachor has emphasized in previous annual meetings. Vehicle prices have soared in recent years, propelled by inflation and supply chain disruptions. Interest rates, meanwhile, remain stubbornly high, complicating the cost of financing for thousands of would-be buyers.

“The inflation of vehicles over the last four or five years and higher-for-longer rates have driven car payments to where it is an affordability issue for many consumers,” Mr. Rachor acknowledged. Yet he was keen to note an unexpected resilience in the market: “The consumer’s been resilient,” he said, indicating continued demand even as economic pressures mount.

Industry watchers have voiced concern that the confluence of higher prices and tariffs could depress consumer demand, forcing dealers and manufacturers to reach deeper into their playbooks for discounts and incentives. However, with little room to maneuver on pricing, and margins already compressed by cost increases, Mr. Rachor suggested a cautious approach.

A Hope for Moderation

Though the specter of tariffs has rattled markets and captured headlines, Mr. Rachor’s forecast ultimately hinges on the likelihood of a moderated outcome—one that is less dire than some early projections.

“I want to share my own perceptions,” he said. “The administration, I think, is learning a lot about the unintended consequences of the originally kind of shock-and-awe announced tariffs.” Pointing to the experience and ingenuity of both automotive manufacturers and their suppliers, Mr. Rachor suggested that “prudent compromises” by policymakers, combined with swift operational adjustments, will soften the blow.

“I think the ultimate manifestation of tariffs will be much more moderate than what has been perceived in the headlines,” he concluded.

While not dismissing the risks facing the sector, the Berkshire Hathaway Automotive chief’s perspective offered some reassurance to investors and industry stakeholders—reminding them that a blend of consumer adaptability, corporate flexibility, and policy recalibration could yet mitigate the forecasted storm. For now, all eyes remain fixed on sales trends, government negotiations, and the resilience of the American auto buyer.