Most people who just drive their cars every day or buy a new one every decade or so never see this, but the automotive industry works off a global rules-based order. Safety regulations tell the car companies what they can and cannot build; the same is true for emissions regulations. Tariffs, trade rules, technology trends, currency fluctuations and other factors all tell those automakers where they can build and how much they can charge—and it takes years upon years to set that all up.
Now, this rules-based order is completely up in the air thanks to the United States’ government’s often-chaotic new tariff plans. It’s going to be costly in every sense of that word. And how the car companies navigate the next few months may well determine how they thrive over the next few decades.
We’re talking about new tariff impacts on today’s edition of Critical Materials, our morning roundup of industry and technology news. Also on deck today: General Motors’ BrightDrop electric van faces an uncertain future, and Google’s Waymo seems to be a big hit for Uber down in Austin. Let’s dig in.
30%: A Tariff Cost Estimate: $100 Billion
Photo by: Patrick George
Hyundai Georgia Metaplant
President Donald Trump may have pulled back last week on country-based reciprocal tariffs, but the auto industry is still facing 25% tariffs on all cars imported to the U.S. And as we saw this weekend with the exceptions to smartphones and electronic devices, everything is far from settled.
A new Boston Consulting Group report, covered by CNBC, puts a potential dollar figure on all of this: more than $100 billion. From that story, emphasis mine:
“What we’re seeing now is a structural shift, driven by policy, that’s likely to be long-lasting,” Felix Stellmaszek, Boston Consulting Group’s global lead of automotive and mobility, told CNBC. “This may well be the most consequential year for the auto industry in history – not just because of immediate cost pressures, but because it’s forcing fundamental change in how and where the industry builds.”
BCG expects tariffs to add $110 billion to $160 billion on an annual run rate basis in costs to the industry, which could impact 20% of U.S. new-vehicle market revenues, increasing production costs for both U.S. and non-U.S. manufacturers.
The Center for Automotive Research, a Michigan-based nonprofit think tank, believes costs for automakers in the U.S. alone will increase by $107.7 billion. That includes $41.9 billion for Detroit automakers General Motors, Ford Motor and Chrysler parent Stellantis.
Both analyses take into account the 25% tariffs on imported vehicles implemented by Trump on April 3 as well as forthcoming levies of the same amount on automotive parts that are set to begin by May 3.
If you don’t know where you can build things, or for how much, everything is on the table.
That story also notes that many automakers should have at least a roughly two-month supply of cars not impacted by tariffs that they can sell right away, so as a consumer, you may not see any immediate price increases. Several car companies have said that they won’t raise their prices at all. At least, that’s what they say right now.
Buckle up, folks. This chaos may well define the future of the entire car business.
60%: GM’s Electric BrightDrop Van In ‘Crisis’
Photo by: General Motors
2025 Chevrolet BrightDrop 600
In the EV world, passenger cars tend to get the most attention. But products like electric delivery vans show tremendous promise for reducing emissions and costs in the commercial space. Right now, Rivian and Ford seem to be doing the best on that front.
General Motors? Less so, unfortunately. Its BrightDrop electric van arm started as a separate brand but was folded under Chevrolet last year. But the automaker still only moved about 1,500 of them in 2024, compared to the 13,423 that Rivian did.
Also, the van is made in Canada. You can see where I’m going with this. Due to both situations, GM is hitting pause on BrightDrop van production for at least five months. At least 1,200 workers will be laid off, according to news reports. Here’s the Detroit Free Press with more:
Last month, a Free Press photographer captured images of hundreds of vehicles lining a Flint storage lot. Reuters published similar photos from CAMI in Ingersoll, Ontario.
Part of the reason BrightDrop sales are lagging in the U.S. is the comparatively high price tag to nearest competitors. Before incentives, the vehicles cost about $74,000. Ford’s E-Transit van with extended battery range, for example, is $51,600—more than $20,000 cheaper—even before applying incentives.
Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said the opaque trade environment spurred by President Donald Trump’s vacillating tariff announcements hardly aided the company’s U.S. sales projections.
“If there’s a tariff with Canada, how do you build any vehicle of volume there to be sold in the U.S.?” Fiorani asked. The economics, and the lack of charging infrastructure, likely made it difficult for the company to find a foothold in the U.S. market, Fiorani said.
“It should be easy to convince a business that you can drive this thing. On paper, it’s a good idea. But business owners that are not used to taking risks won’t buy something they don’t understand fully,” he said. “In early 2020, when everybody was delivering things directly to their homes, this was a perfect vehicle for that market.”
I doubt GM is going to give up on the potentially very lucrative electric commercial fleet market. But it may need to rethink some things eventually.
90%: Waymo Is A Hit In Austin
Tesla is supposedly launching its first “unsupervised” robotaxi service this summer in Austin. But when it does, it’ll face stiff competition from Google’s Waymo, which seems to be increasing in popularity in Texas’ capital city rather quickly. About 20% of Uber rides in Austin are Waymos now. Here’s Bloomberg with more:
Waymo robotaxis made up about 20% of rides offered by Uber Technologies Inc. in Austin in the last week of March, underscoring how consumers have warmed to the autonomous service since the companies launched a partnership early last month.
The analysis was based on customer email receipts collected by market analytics firm YipitData. The firm also found that Waymo, Alphabet Inc.’s autonomous vehicle unit, has racked up 80% more driverless rides in its operating zone in Austin in the first 27 days of offering service than it did in the early days of its San Francisco launch. A key difference in the rollout is that Waymo trips are exclusively available through Uber in Austin, while in San Francisco they’re available only through Waymo’s own app.
It turns out that partnering with Uber really was the way to go here. Will that inform how future ride-hail services work?
100%: Will We See Any Brands Bow Out Of The U.S. From Tariffs?
We’ll have more soon here about the U.S. debut plans for the Volkswagen Group’s Cupra brand. But it’s an example of how any automaker not making cars here—and that’s a lot of them—may be cooked as the tariff war continues. Are you more bearish on some brands than others? Share your theories in the comments.
Contact the author: patrick.george@insideevs.com
