The Impact of US-Based Production on Automakers: How the Trump-Puzzle is Driving the Cost of American-Mexican Sports Cars
Volvo is thinking about boosting its US-based production, including bringing new models to the factory it operates in Ridgeville, South Carolina, the company’s CEO told Bloomberg. The Volvo plant builds the Polestar 3 and the EX90 SUV in order to take advantage of the federal EV tax credit.
The New York Times reported that VW is adding “import fees” to the price of imported cars. The amount will be determined later in the month. This was the clearest example to date of Trump’s tariffs leading to higher costs for consumers.
Buyers scurry to beat the tariffsAs car companies weigh whether to charge more, buyers appear to be taking advantage of pre-tariff pricing. This was the second highest sales month in the company’s history. The car maker has been ramping up production in the U.S. — not in response to the new tariffs, just happy timing, executives say — which should protect them from some of the import taxes. A Toyota spokesperson said the Japanese automaker also saw sales bump at the end of March from increased customer traffic at dealers.
Tesla, which is dealing with its own problems, hasn’t immediately responded to the news of the tariffs. That said, CEO Elon Musk has made several comments in response to commentary on X that Tesla is better insulated from the new fees as a result of selling only vehicles made in the US to American customers.
“We understand that the current environment creates uncertainty,” Antonio Filosa, chief operating officer for the Americas at Stellantis, said in an email to employees. We are very involved with our key stakeholders, including top government leaders, unions, suppliers, and dealers as we work to manage and adapt to these changes.
The company temporarily halted production at some of its assembly plants in Mexico and Canada. As a result, the company said that 900 people would be temporarily laid off at several Stellantis factories in Michigan and Indiana.
The parent company of Jeep, Dodge, Ram, Maserati, and others has good news and bad news to share in response to the tariffs. It is copying the Ford idea of employee price discounts to the public. The bad news is that it’s temporarily laying off 900 workers while pausing production at several factories.
Porsche has never been the cheapest sports car on the block, but tariffs are likely to put renewed pressure on its prices. Last month, the company’s executives told reporters that it was likely to pass the cost of tariffs along to its customers, according to The Wall Street Journal.
Nissan is making some very difficult decisions. The company stopped making the car at its plant in Mexico. Nissan said production is likely to keep going for those models in other markets.
Nissan initially said that it would cut a shift at the Smyrna, Tennessee, assembly plant where it makes its popular Rogue SUV once Trump’s tariffs went into effect. But now that the tariffs are here, the company reversed itself, committing to keeping two shifts at the factory.
The impact of U.S. tariffs on the luxury automotive market: Mercedes-Benz, Ford and the Autos Drive America trade group in the Detroit area
The entry-level model of the luxury automobile, like the GLA, is said to be being considered for removal from the US market. As of now, no decisions have been made, but Mercedes-Benz is still assessing the impact of the US-tariff lines.
I am appalled. It will kill Jaguar Land Rover here in the town,” one resident told The Guardian. “There could potentially be job losses because JLR export enormously to America. The effect is going to be huge.
JLR is holding off on any immediate decisions, telling UK-based media that its local business remains “resilient.” But residents of the town where Jaguar operates its factory were dour about the news.
James Bell said in an email that the company is committed to growth in the U.S. automotive industry through production and innovation.
President Donald Trump’s 25% tariffs on all auto-related imports have been described as a debacle of epic proportions and a sure-fire way to tank the auto market. Analysts have been predicting everything from $12,000 per vehicle price hikes to the possible “Cubanization” of the US car fleet.
Meanwhile, Honda dealers are reassuring their customers that most of their most popular vehicles are made in the US. Chris Martin referred to the Autos Drive America trade group, which claims it is impossible to rebuild supply chains in a matter of weeks because of the financial burden of tariffs.
The Japanese automaker may not be merging with Nissan, but its already making moves to adjust to the tariffs. The next-gen Civic hybrid will be manufactured in Indiana rather than Mexico, to avoid import duties, according to a report.
General GM told its employees at the Fort Wayne plant that it would increase production of light-duty trucks and add some temp workers to backfill during summer vacation. The company is also considering shifting some of its truck production from Mexico to the US. GM is not making any physical upgrades to the plant, just adding additional temporary people to support it.
The discount may help Ford clear out some of its ample inventory, which stood at a 74-day supply of vehicles on its dealers’ lots at the end of March, compared to 50 days for GM, according to JP Morgan Global Research.
Ford says it understands that these are uncertain times for many Americans. “Whether it’s navigating the complexities of a changing economy or simply needing a reliable vehicle for your family, we want to help.”
The company stated that there are significant savings on a number of vehicles, including gas, hybrid, plug- in hybrid, and diesel Ford and Lincoln vehicles. EV customers will get the discount on top of the Ford Power Promise deal, which extends through June 30th and includes a complimentary home charger. The Ford Explorer and Navigator SUVs are not included in the limited-time offer.
Ford was first out of the gates with a response geared towards people panic shopping, hoping to take advantage of pre-tariff sticker prices. The program is called “From America, For America” and it offers employee pricing to everyone.
BMW hasn’t announced any specific response yet, but the company said last month that it expected a €1 billion hit to its 2025 earnings as a result of tariffs.
Now that the tariffs are in effect, the German automaker is holding all vehicles assembled in Mexico and overseas at US ports until further notice, according to Automotive News. In dealer stock and at the port they have 37,000 units ready to sell, which is unaffected by the new import fees. The $0 “No Added Import Fee” option code would be used to mark unaffected units.
U.S. Trade-off Impact of High-Cost Automobiles in the Presence of a New Tax Cut Cut-off
is transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. His work appeared in both the New York Daily News and City & State.
Buyers have rushed to the dealership in anticipation of future sticker shock as industry analysts expect consumers to see higher car prices.
Starting May 3, the tariff will also apply to imported car parts, such as engines and transmissions, which could add to the cost of cars assembled in the U.S.
The company has supplied Jaguar SUVs to the company that owns and operates the Waymo service. It’s not yet clear whether the tariffs will affect Waymo’s service.
The company said in an email that the USA is an important market for their luxury brands. “As we work to address the new trading terms with our business partners, we are enacting our planned short-term actions including a shipment pause in April, as we develop our mid- to longer-term plans.”
White House officials have said that foreign companies will absorb the costs of tariffs. But a study by the National Bureau of Economic Research, a nonpartisan nonprofit organization, found that’s not what happened during Trump’s first term — when costs were mostly passed on to U.S. businesses and consumers.