Chevrolet Silverado trucks displayed at a Chevrolet dealership in Vallejo, California, United States, on Monday, March 3, 2025.
Source: Bloomberg | Bloomberg | Getty Images
Wall Street analysts predict that President Donald Trump’s heavy new tariffs on imported vehicles will significantly raise costs for U.S. consumers purchasing both domestic and foreign cars.
On Wednesday, Trump announced a 25% tariff on imported passenger cars and light trucks, in addition to critical auto components like engines, transmissions, and powertrains.
According to various analysts’ assessments, the added tariffs could lead to an increase of $4,000 to $15,000 per vehicle for consumers, depending on the proportion of imported parts in each car.
The tariffs are set to take effect at midnight on April 3, with Trump stating they will be “permanent.”
However, there are a few important exceptions: Importers of vehicles that comply with the North American trade agreement known as USMCA will only incur tariffs on the “non-U.S. content” of their cars. Additionally, USMCA-compliant auto parts will not face tariffs until the Trump administration establishes a method for implementing these partial tariffs.
While Trump’s tariff policy has created uncertainty in the markets, many analysts quickly pointed out that this latest measure may have significant repercussions for the automotive sector.
What will be the extent of the price rise?
Analysts were quick to work Thursday to provide their investor clients with estimates of the potential consequences.
Bernstein analyst Daniel Roeska described Trump’s decision as a “profound disruption to the global automotive framework,” estimating an overall sector tariff impact around $6,700 per vehicle.
Rick Paterson from Loop Capital cautioned that consumers should prepare for “sticker shock,” as prices for imported vehicles may soar by as much as 25%, with some domestic manufacturers likely raising prices as well “under that higher umbrella.”
Ronald Jewsikow from Guggenheim estimated price increments between $6,000 and $7,000 per vehicle, highlighting that “the actual cost increases for consumers needed to counterbalance the tariff may be even greater.”
Goldman Sachs analyst Mark Delaney opined that a 25% tax on imported vehicles could escalate prices by $5,000 to potentially $15,000. He also noted that domestically produced vehicles would witness price hikes due to component tariffs raising production costs by up to $8,000.
Bank of America anticipates a minimum increase of $4,500 per vehicle.
Analysts believe that different car manufacturers will experience varying effects from these tariffs. Both Bernstein’s Roeska and Dan Levy from Barclays specifically pointed to Elon Musk’s Tesla as being relatively insulated from the potential negative impacts of the tariffs, thanks to its domestic manufacturing.
Musk, who is Trump’s largest campaign contributor, has played a significant role in his administration through initiatives aiming to streamline government, such as DOGE. Despite Tesla’s stock experiencing a notable decline this year, Trump and other officials have praised the automaker publicly.
On Wednesday evening, Musk acknowledged that Tesla isn’t completely protected from the new tariffs.
“To clarify, this will affect the cost of parts in Tesla vehicles sourced from other countries,” he mentioned on X. “The financial impact is significant.”
