As U.S. field tariffs enter its second week, it is unclear how global trade policies affect car prices. What is guaranteed is: things will become more complicated for electric cars.
Many of the most popular battery-electric and plug-in hybrid models are assembled outside the United States, so they will be subject to a new 25% tariff when they are above the border. These new fees even apply to some American brand cars carrying American Marquis, but are pooled in factories in Mexico or Canada. For example: Chrysler Pacifica Phev is placed together in Canada, and Ford Mustang Mach-E and Chevrolet Equinox EV are built in Mexico.
On the other hand, many foreign car brands, including BMW, Kia and Volkswagen, make some battery-powered cars in U.S. factories, meaning that specific models won’t be hit by automatic import taxes. With modern Ioniq 5 and Kia Sportage PHEV built in Georgia.
Due to the launch in early May, there was also an increase of 25% auto parts tariffs and a 25% auto parts tariff, and a country-specific mutual tariff, which increased the 10% fee, causing goods manufactured outside the United States to charge a 10% fee and could increase in July. Major U.S. auto parts imports include aluminum wheels from China, tires from Thailand and wire harnesses from Vietnam, according to data compiled by consulting firm Alixpartners.
Crucially, the U.S. said this week it will impose reciprocal tariffs on goods made in Mexico and Canada, where some auto suppliers make parts. These have been exempted previously.
Additionally, it is unclear how automakers will choose to handle these new business expenses. Will they allocate the cost of import fees throughout the lineup, thereby increasing all prices? Try to absorb tariffs and ask suppliers to help them?
The barriers to new fees add more uncertainty to the already identified electric vehicle industry. Many automakers, including General Motors, Toyota, Ford and Volvo, have announced that they have retreated from their ambitious electrification plans even before new tariff announcements bring chaos into global markets and outlook. The future of U.S. electric vehicles and PHEV tax credits surfaced. Buyers’ interest in electric vehicles has also diminished. Now, tariffs bring additional cost challenges to the additional challenges that already promise to be tough electric.
According to an analysis by research firm Bloomberg, a total of about 35% of electric vehicles were sold outside the United States last year. Looking ahead, Japanese and European automakers will bear the brunt of tariffs. For example, all Mazda electric cars are assembled outside North America, and most of Toyota are placed outside the United States. Nearly 90% of the 34,000 electrical units sold by Mercedes-Benz last year were gathered overseas.
