By Keith Naughton, Bloomberg
Car buyers will bear the brunt of the $30 billion cost of President Donald Trump’s tariffs, driving up already high US auto prices by almost $2,000 per vehicle, according to consultant AlixPartners.
The firm expects auto companies to pass along 80% of the cost of Trump’s tariffs — which it calculates as $1,760 more per car. AlixPartners, as part of its annual global automotive outlook, also cautioned that the administration’s anti-electric vehicle policies risk relegating American automakers to bit players in the global EV market.
“These tariffs bring a big wall of cost,” Mark Wakefield, global auto market lead for AlixPartners, told reporters in an online briefing. We see “consumers taking the majority of the hit.”
General Motors Co. and Ford Motor Co. have already said they expect a $5 billion and $2.5 billion tariff impact this year, respectively, though they say they will find offsets in part through price adjustments.
Those higher prices will result in about 1 million fewer vehicles sold in the US over the next three years, Wakefield said. But the consultant expects US auto sales to reach 17 million in 2030, 1 million more than last year, as the impact of tariffs abates.
AlixPartners’ predicted sales hit is more muted than some other projections because the firm sees tariff rates falling as the US negotiates trade deals with other countries. It forecasts the 25% auto tariff will ultimately fall to 7.5% on assembled autos, 5% on parts and even lower on cars and parts that are compliant with the US-Mexico-Canada trade agreement.
“This tariff wall is not likely to last forever,” Wakefield said.
What’s likely to have a longer-lasting impact is the Trump administration’s move to reduce and eliminate incentives to spur the sale of electric vehicles, such as the $7,500 consumer tax credit for purchasing a battery powered model, he said.
That will steer car buyers away from EVs as they “follow their…
Read the full article here
