Tesla and the Other American Car That Are Way Cheaper Due To Trump’s Tariffs
Written by
John Csiszar
Edited by
Rebekah Evans
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The Trump Administration’s imposition of tariffs on vehicles and car parts made outside of the United States have turned the auto market on its head. Most economists seem to agree that the tariffs will increase costs for nearly all automakers and consumers will pay the price.
Even cars with famously American nameplates, like Ford and GM, will likely see vehicle prices increase, perhaps by thousands of dollars per vehicle. But two automakers seem poised to benefit from the turmoil.
Here’s how the tariffs will affect the overall market and who the likely winners will be if they remain in place.
Tesla and Rivian
As reported by CNBC, several industry analysts see Tesla and Rivian as winning the tariffs war, at least as it comes to auto manufacturers. These two companies are among the few who produce 100% of their vehicles in the United States, making them obvious winners over foreign manufacturers like Honda and Toyota.
However, Tesla and Rivian also have an edge over domestic manufacturers like Ford and GM. According to Daniel Roesak, an analyst for Bernstein, “Tesla wins, Detroit bleeds.” Roeska thinks Tesla in particular is “better insulated” from trade risk and the “clear structural winner” of Trump’s tariff policy.
UBS analyst Joseph Spak agrees with Roesak, saying both Tesla and competitor Rivian could “fare better” since they both produce 100% of their vehicles in America. The stock market seemed to agree with Spak, as Rivian shares popped by 7% the day after Trump announced the 25% tariffs on auto makers.
What About Other ‘American’ Automakers?
Since the goal of Trump’s tariffs is to protect American businesses and allow them to compete on a level playing field, it would seem logical to think that the big legacy American auto makers, like GM and Ford, should benefit as well. Unfortunately, in today’s multinational economy, hardly anything truly gets produced 100% domestically and that’s definitely true in the case of Ford and GM.
According to Bloomberg, for example, nearly half the vehicles GM sold in America in 2024 were built abroad. Ford is a bit more American-focused, but still assembles about 21% of its cars overseas, according to Ford Media. That means that even these most American of companies still rely heavily on overseas parts and production – thus subjecting them to some of the very tariffs designed to protect them.
Spak sees the price of Ford and GM cars spiking by as much as $4,000 to $5,000 per vehicle if the companies pass through the cost of the tariffs. Ford would likely be shielded more than GM, as it has more domestic production, but in both cases, prices are expected to rise.
Will the Tariffs Last?
For now, auto pricing is in a nebulous place. Dealers of all brands are making whatever defensive adjustments they can without fully committing to one direction or the other, as the tariffs may vanish as quickly as they were implemented. On April 29, for example, Trump already softened the most draconian aspects of the tariffs, according to Reuters and further reductions may — or may not — be on the horizon.
What Should Buyers Do?
Given the current environment, many analysts suggest that if you’re already in the market for a new car, it might make sense to move sooner rather than later. Prices are unlikely to fall in the current environment and if the tariffs remain in place, they may very well jump higher.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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