Car companies are responding to tariffs by raising prices
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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 is able to build the Polestar 3 and the EX90 SUV because of the federal EV tax credit.
VW is adding “import fees” to the price of imported cars sold in the US, The New York Times reported. The exact amount will be determined later this month. It was the most clear example of tariffs leading to higher costs for consumers.
In order to assure customers that they would not see a price hike for their current models, the company put on a show. Toyota, which has several production plants in the U.S., also has no immediate plans to increase prices, company spokesperson Victor Vanov said in an emailed statement. The U.S. was Toyota’s biggest market last year, with more than 2 million vehicles sold.
The company that is dealing with its own problems did not reply immediately 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.
The immediate layoffs and production pauses were necessary given the current market dynamics, according to the email that Antonio Filosa sent to employees on Thursday.
There is a temporary halt to production at some of the assembly plants in Mexico and Canada, which makes Jeep, Dodge, RAM trucks and Chrysler. 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. The bad news is that it isn’t doing a good job of matching employee price discounts to the public. The good news is that it is pausing production at a few factories while laying off 900 workers.
Porsche has never been the cheapest sports car on the block, but tariffs are likely to put renewed pressure on its prices. The executives at the company told reporters last month that they would pass on the cost of tariffs to their customers.
Nissan is making some difficult decisions. The Infiniti QX55 is made at the company’s plant in Mexico. Nissan expects production of the models sold in other markets to continue.
Nissan initially said it would cut a shift at the assembly plant that makes the popular Rogue SUV, once the tariffs went into effect. But now that the tariffs are here, the company reversed itself, committing to keeping two shifts at the factory.
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The entry-level GLA is said to be one of the models that could be pulled from the US market. But no decisions have been made yet, as spokesperson Amanda Painter said that Mercedes-Benz was still “currently assessing the impact of the US-tariff lines.”
I am appalled. One resident said it would kill Jaguar Land Rover in the town. There could be job losses because of the JLRC exporting so much to America. The knock-on effect is going to be enormous.”
The local business of JLR remains resilient, the company told UK media. The Jaguar factory is in the town where residents are dour about the news.
“Hyundai Motor, including Kia, Hyundai and Genesis, remains committed to the long-term growth of the U.S. automotive industry through localized production and innovation,” spokesperson James Bell said in an email.
President Donald Trump’s 25 percent tariffs on all auto imports have been called a debacle of epic proportions and a sure way to tank the auto market by crushing demand. 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 said that the Autos Drive America trade group said it is “impossible to rebuild those supply chains in a matter of weeks” because of the added financial burden of tariffs.
The Japanese automaker may not be merging with Nissan, but its already making moves to adjust to the tariffs. According to a report last month, the company is planning on producing the new Civic hybrid in Indiana to avoid import duties.
GM has plants in Mexico and Canada that make the Chevrolet and Sierra trucks. A recent report states that half of GM’s large pickup truck production takes place in Mexico and Canada.
Ford had a 74 day supply of vehicles at the end of March, which was three days more than GM, according to JP Morgan Global Research.
“We understand that these are uncertain times for many Americans,” Ford says on its website. “Whether it’s navigating the complexities of a changing economy or simply needing a reliable vehicle for your family, we want to help.”
The promo runs April 3rd through June 2nd and offers “significant savings” on a number of 2024 and 2025 gas, hybrid, plug-in hybrid, and diesel Ford and Lincoln vehicles, according to the company. 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. There is a limited-time offer that excludes models like the Ford Raptors and Navigators.
Some carmakers are slashing prices in response. Ford, which makes more of its cars in the U.S. than any other automaker, is offering employee pricing for customers as part of its “From America, For America” promotional campaign. According to reports, Stellantis has followed suit. Car and Driver reported that Nissan slashed prices on some of its best-selling models, to help buyers face a challenging car-buying landscape.
BMW said it will cover the inflated costs from the Trump Administration’s tariffs on its carsmade in Mexico, until at least May.
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. The new import fees do not apply to the 37,000 AUDI units in dealer stock and at the port. A $0 option code will be used to mark unaffected units for easy tracking.
Transportation News: Implications for Waymo, a US manufacturer of electric Jaguars, and for foreign imports in the aftermath of the tariffs
is transportation editor with 10+ years of experience who covers EVs, public transportation, and aviation. His work has appeared in The New York Daily News and City & State.
Some potential buyers have rushed to the dealership to be sure they get the best price, because analysts say consumers will see higher car prices in the future.
The tariffs on imported car parts will start on May 3 and could affect the cost of cars assembled in the U.S.
The company has provided electric Jaguar SUVs for Waymo, the driverless ride-hailing service owned by Google’s parent company. It’s not yet clear whether the tariffs will affect Waymo’s service.
“The USA is an important market for JLR’s luxury brands,” the company said in a an emailed statement on Saturday. “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. The National Bureau of Economic Research found that when costs were mostly passed on to businesses in the U.S. it wasn’t the case during Trump’s first term.