The Trump administration's 25% tariffs on imported cars and auto parts have been implemented and are expected to disrupt the automotive industry significantly. American consumers could face price increases of $2,500 to $5,000 on lower-priced vehicles, while SUVs may see hikes up to $12,000. Electric vehicles are particularly vulnerable, with potential price jumps exceeding $15,000, translating to an estimated total increase of $30 billion in vehicle costs within a year. Despite efforts toward domestic manufacturing, many EVs still rely on imported components, complicating the impact of these tariffs.
The IRA has led to the establishment of domestic production facilities, but the transition is still ongoing.
Many SUVs are assembled in the U.S. but have parts from Canada, Europe, and Mexico, and could see price hikes of $10,000 to $12,000.
Elon Musk himself said that the cost impact of these tariffs is 'not trivial.'
U.S. consumers could see an estimated $30 billion increase in the cost of cars in the first full year of the tariffs.
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