POLITICS

Many EVs Are Made in America. And Could Dodge Trump’s 25% Auto Tariffs

March 27, 2025

Trump’s new 25% auto tariffs start April 2 and target imported cars, trucks, and parts.
EV sales are steady, but dealer discounts are already shrinking ahead of anticipated price hikes.
Many electric vehicles, including Tesla, Ford, and Hyundai models, are built in the USA and could avoid some tariff costs.

Your wallet is about to feel it. And no, this time it’s not gas prices or interest rates. It’s your next car.

Starting April 2, President Trump is slapping a 25% tariff on imported passenger vehicles, light trucks, and a wide range of auto parts. Doesn’t matter if it’s a budget-friendly sedan or a fancy SUV, if it crosses the border, it’s going to cost more. And that’s not a hypothetical. This is happening.

So, what does that mean for you, the car buyer?

Why Ford Is Hitting the Brakes on F-150 Lightning Production Until Jan 6 2025 — _{White and red Ford F-150 Lightning electric trucks parked side by side at Electrify Expo.}

What This Tariff Really Means

First, this isn’t just politics. It’s economics. Tariffs like these will raise the cost of vehicles and parts that aren’t built here. Some fully imported cars may see price tags jump by several thousand dollars. For vehicles that rely on globally-sourced components? The pain will spread.

Trump made the pitch crystal clear, “We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth.” Love him or hate him, that’s the play. Bring production home or pay the price.

And the price is steep.

According to Cox Automotive, “We expect disruption to virtually all North American vehicle production amounting to 20,000 fewer vehicles produced per day.” That’s not a typo. Twenty. Thousand. Per. Day.

Inventory levels haven’t recovered since COVID. Dealers are bracing for supply chain chokeholds. And guess what? Many are already cutting discounts, and fast.

Jonathan Smoke, Chief Economist at Cox, explains, “Had this happened in 2019, with more than 20% more inventory than we have today, tariffs wouldn’t pose nearly as much of a threat.”

But they didn’t. And now they do.

Auto Sales Are Still High. But the Clock’s Ticking

Despite looming tariffs, March 2025 auto sales are climbing. J.D. Power and GlobalData estimate total new-vehicle sales will reach 1.52 million units this month, up 9.6% year-over-year.

Retail sales are even higher. Up 13.0% from March 2024. But it’s not all good news.

“Consumers are accelerating purchases to avoid potential tariff-related price increases,” said Thomas King, President of Data at J.D. Power. “The prospect of tariffs is already beginning to affect the industry.”

Translation: people are panic-buying. And for now, that urgency is keeping sales up. But once the rush dies down and those tariffs kick in? Prices could jump, and affordability could fall off a cliff.

King continued, “Average monthly finance payments in March are on track to reach $731… the highest on record for the month of March.” Interest rates aren’t helping either. New car loans still hover at 6.82%. Combine that with shrinking discounts and higher MSRP? You’re looking at a perfect storm.

Electric Vehicle Sales: Holding Steady, Built in the USA

Now for some good news, especially if you’re EV curious.

EV retail share crossed 10% in March, according to J.D. Power. That’s a solid bump, despite political drama and shifting policy threats. Why? Because EVs are being built here in the USA. A lot of them.

Here’s the thing most people don’t know: many EVs are proudly made in America. That means they could sidestep the worst of the tariffs. Here’s a quick rundown:

Tesla is producing the Model Y and Cybertruck in Austin, Texas. And batteries in Nevada. “Tesla’s domestic production strategy puts it in a stronger position,” Cox noted.
Ford’s $5.6 billion BlueOval City in Tennessee is gearing up for electric pickups like the F-150 Lightning.
Hyundai is cranking out the Ioniq 5 in Georgia.
Volkswagen makes the ID.4 in Tennessee using U.S.-sourced parts from 11 states.
GM’s Ultium Cells plants in Ohio and Tennessee are powering the next wave of American EVs.
BMW, Honda, Kia, Mercedes-Benz, Polestar, Rivian, Lucid – all expanding U.S. production.

These aren’t future promises. They’re factories on U.S. soil. Real vehicles. Real jobs. And, most importantly, real protection against rising import costs.

Volkswagen ID.4 at Electrify Expo with attendees exploring the vehicle. — _{People checking out a Volkswagen ID.4 electric SUV at Electrify Expo.}

Tesla’s Slippery Moment

But not everything’s humming at Elon Musk’s empire. Tesla’s sales are down. Market share is slipping below 48.7%, according to Kelley Blue Book, and under 4% in Q1 2025 new vehicle sales forecast.. KBB noted that “a controversial CEO” and political backlash could be weighing the brand down.

Stephanie Valdez Streaty, Cox’s Director of Industry Insights, said in the presentation, “Controversies surrounding CEO Elon Musk, and the loss of the exclusive access to the supercharger network, have impacted the brand’s image and competitive advantage.”

The upcoming Model Y Juniper refresh? It needs to land hard. Or Tesla’s best days could be behind it.

Meanwhile… Prices Climb

The average transaction price for a new vehicle is now $44,849. That’s $637 higher than March 2024. Consumers are expected to spend nearly $53.5 billion on new cars this month, a record for March. Incentives are up from a year ago but down from last month.

Retailer profits per unit? Down 8% year-over-year.

Fleet sales? Falling.

Used car prices are holding steady at around $28,552, according to J.D. Power, but pressure’s building. When new cars cost more, used cars follow.

Hyundai IONIQ 5 at Electrify Expo San Francisco

So What Should You Do?

Buy now or wait?

If your current car’s on life support, now may be the time to act. Prices are rising. Incentives are tightening. Inventory isn’t getting better overnight.

But be smart. Look at American-made EVs. They’re already more cost-effective to own, and many models won’t get slammed by tariffs. And they’re not a “liberal thing.” They’re just smarter. Period.

As Elizabeth Krear, VP of EVs at J.D. Power, said, “EVs have demonstrated a lower total cost of ownership than non-EVs for 13 consecutive months.”

Forget what you think you know. Do the math. Run the numbers. See where your money actually goes.

Because the real threat isn’t battery range. Or plug locations. It’s that your next car could cost thousands more, just because of where it’s made.