EV adoption

General Motors blamed Trump’s tariffs for costing it $1.1 billion in Q2 and as much as $5 billion by the end of the year. And while the new anti-EV adoption policies are yet to fully bite, it’s clear they’ve motivated some action inside the GM boardroom. Although GM CEO Mary Barra wrote to investors that the company believes “the long-term future is profitable electric vehicle production,” she followed by explaining that GM’s flexible factories will help it succeed in a world where EPA fuel economy targets are no longer a thing. That’s probably why GM added 300,000 more units of capacity for “high margin light-duty pickups, full-size SUVs and crossovers.”

Ford said that the tariffs could cost it as much as $2 billion this year, despite it making more actual vehicles in the US than any other automaker. That’s because it has to pay the US government to import raw materials like steel and aluminum, as well as components and subassemblies.

Foreign automakers are also feeling the effects, given the importance—until now, at least—of the US car buyer. Stellantis, which owns the Jeep and Ram brands, said it had already lost $2.7 billion this year due to tariffs, although the automaker stands to benefit in the coming years from the gutting of fleet fuel efficiency fines.

Aston Martin may benefit from a lower 10 percent tariff for UK-made cars, but it described the process as “extremely disruptive,” and although it has now restarted shipping cars to America, it issued a profit warning last week.

BMW is among the less badly hurt; although its operating margin fell to 5.4 percent, this was within its expectations. Mercedes had to warn investors to expect less this year, and it says the US will become a less-important market for the company, which plans to make up for it with growth in China. Volkswagen Group said the tariffs have cost it $1.5 billion so far this year, and it has also revised down its forecasts for the rest of the year.

Although Porsche announced record deliveries in North America just a week ago, its operating profit was a third of that a year ago. “In the US, import tariffs are also putting huge pressure on our business. Looking ahead, the movement of the dollar could also have an impact. In addition, the transformation to electric mobility is progressing more slowly than expected overall, with consequences for the supplier network,” said Porsche and VW Group CEO Oliver Blume.

Winners and losers

However, averages conceal a lot, and not all cars are becoming more expensive. US-made vehicles got cheaper to the tune of $191 per car, and cars.com says that more and more consumers are searching for domestically made vehicles to save money. Imports from the UK have gotten the most expensive—increasing by an average of $10,129—since these are almost all luxury cars with high purchase prices. (A new, lower tariff was recently negotiated by the UK.) A less pronounced effect can be seen with vehicles from the EU, where the mix still contains plenty of premium cars; average EU car prices in the US have risen $2,455 since the start of the year. Japanese imports are in third place, with an average increase of $1,226.

But imports from South Korea, China, and Canada have also dropped in average price. Some of this is due to a reduction of imports or a change in trims—General Motors is bringing in fewer cars from South Korea, and both it and Hyundai are bringing over more cars with lower trim levels.

Which is a spot of good news for the bargain hunter. While the perception is that dealerships only stock fully loaded vehicles, cars.com found that 34 percent of new car inventory is made up of low trim-level vehicles, up from 30 percent two years ago. And only a quarter of new vehicles are fully loaded. Meanwhile, it’s the middle that’s been squeezed, as mid-level trims make up 41 percent of new vehicle inventory, down from 46 percent in 2023.

The electric vehicle market is facing perhaps the most significant challenge this year, as the Republican Party has succeeded in its efforts to eradicate incentives meant to drive EV adoption. The EV tax credit for both new and used cars will be gone on October 1, which will make many new EVs $7,500 more expensive for most of their buyers. And it’s not like EVs were cheap to begin with: average MSRP for a new EV is around $65,000, although KBB found that the average transaction price for a new EV in June was $56,910, reflecting the current incentives.

Bargain hunters should consider buying pre-owned. While new EV supply has grown by 15.1 percent year on year, used EV inventory grew by 31.3 percent over the same period, with prices dropping by 3.5 percent to an average of $35,629 in the process.