Imagine saving up for a shiny new ride only to see its price tag jump by $3K overnight. 🚗💸 That's the reality U.S. car buyers might face thanks to steep tariffs on imported parts.
General Motors, the top-selling automaker in the US, saw net income drop 35% in Q2 after paying $1.1 billion in tariffs. Ford isn't far behind, bracing for a $3 billion hit in 2025 and shelling out $800 million just this quarter. Even Stellantis, maker of Jeep and Ram, lost $350 million to the levies.
Consultants from Anderson Economic Group say these duties add an extra $2,000 to $3,000 to each vehicle assembled stateside. For now, carmakers are absorbing the costs to keep prices stable, but experts warn the brakes won't hold for long.
Lenny LaRocca from KPMG predicts significant price hikes early next year. Cox Automotive paints an even bigger picture: imported cars could jump $5,000, pushing the average new-car price above $50,000 by year-end.
Planting new factories in the US could ease the pain, but building once is costly and takes years. Many suppliers still find it cheaper to pay a 25% duty than to move production back home.
Buckle up, car shoppers. 2025 is shaping up to bring some sticker shock. But as automakers navigate these tariff twists, you'll want to keep an eye on that window sticker before you drive off the lot.
Reference(s):
Price hikes on horizon as US tariffs squeeze American automakers
cgtn.com
