The new 25% auto tariffs are expected to hit Detroit's "Big Three" - General Motors, Ford, and Stellantis - particularly hard. According to JATO Dynamics, these automakers are "more exposed" to tariffs than their German and Japanese counterparts, with imported vehicles accounting for 18% of GM's global sales last year1. The Center for Automotive Research estimates that the Detroit Three will face combined additional costs of $42 billion, with an average tariff cost of $4,911 per vehicle for imported parts, higher than the industry average of $4,23923.

• The Big Three face unique challenges:

  • Higher reliance on imported parts compared to foreign competitors

  • Significant production in Mexico and Canada now subject to tariffs

  • Potential disruptions to existing supply chains and production schedules

  • Stellantis considering helping suppliers pay tariff costs to mitigate impact1

The implementation of the 25% tariff on imported vehicles is expected to significantly increase car prices in the U.S. market. Luxury European imports could see price hikes of $8,000 to $10,000, while high-end sedans, SUVs, and sports cars manufactured overseas may experience price surges exceeding $20,0001. Even domestic vehicles will be affected due to their reliance on imported parts. Industry analysts predict:

• Average new vehicle prices could rise by $2,500 to $20,000, depending on the model1

• A typical car's price may increase by $5,000 to $10,000 "out of the gates"2

• The average selling price for a new car, which stood at $49,740 before the tariffs, is likely to climb further3

• Some automakers, like Ferrari, have already announced a 10% price increase on models imported after April 24

These price hikes are expected to impact consumer choices and potentially squeeze some buyers out of the new car market altogether2.

The automotive industry faces unprecedented supply chain challenges due to Trump's tariffs, with ripple effects extending far beyond vehicle costs. Manufacturers are grappling with increased expenses for imported components, forcing them to reevaluate production strategies and sourcing12. The semiconductor shortage continues to plague the sector, with chip content per vehicle expected to grow by 7% annually through 20302. These disruptions have led to production delays, limited output, and even paused exports to the U.S.1

• OEMs are exploring strategies like supplier diversification, localized production, and stockpiling critical components3

• The global light vehicle market is projected to grow modestly in 2025, reaching 91.4 million units3

• Chinese automakers are ramping up local production in Europe to mitigate potential tariff impacts3

• Supply chain experts warn of potential supplier bankruptcies and resource reallocation, which could further drive up costs for consumers4