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3w ago

U.S. Auto Industry Faces Price Hikes as 25% Tariffs Take Effect This Week

General Motors reports record Q1 sales growth, while Ford sees a slight decline, as consumers rush to buy cars ahead of anticipated tariff-driven price increases.

FILE - The 2024 Ford F-150 truck is assembled at the Dearborn Truck Plant, April 11, 2024, in Dearborn, Mich. (AP Photo/Carlos Osorio, File)
FILE - The new Toyota Prius 2024 on display at the AutoMobility LA Auto Show, Nov. 16, 2023, in Los Angeles. (AP Photo/Damian Dovarganes, File)
FILE — Vehicles are passed through final inspection at the end of the assembly line at the General Motors facility in Spring Hill, Tenn., Oct. 7, 2024. Sales of cars picked up recently partly as buyers rushed to lock in deals before President Trump’s 25 percent tariffs on cars and auto parts go into effect. (Brett Carlsen/The New York Times)
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Overview

  • The Trump administration's 25% tariffs on imported vehicles and parts are set to take effect on April 3, 2025, likely raising car prices by $5,000 to $10,000.
  • General Motors reported a 17% increase in Q1 sales, delivering 693,353 vehicles, its strongest first-quarter performance since 2018, with electric vehicle sales nearly doubling.
  • Ford's Q1 sales declined by 1.3% to 501,291 units, partly due to the discontinuation of the Ford Edge, though March retail sales rose 19% as consumers hurried to buy before tariffs.
  • Affordable vehicle options continue to shrink, with only 13% of new cars priced under $30,000, down from 37% five years ago, a trend expected to worsen with the tariffs.
  • U.S. retail inventory levels surged 31.3% year-over-year in March, reaching 2.2 million units, driven by a pre-tariff buying spree from consumers.