Building Cars In America Doesn't Stop Automakers From Feeling The Tariff Hits

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Happy Tuesday! It's August 5, 2025, and this is The Morning Shift — your regular roundup of nan apical automotive headlines from astir nan world, successful 1 place. This is wherever you'll find nan astir important stories that are shaping nan measurement Americans thrust and get around.

In this morning's edition, we're looking astatine really tariffs are hitting made-in-America cars, arsenic good arsenic their effects connected Japanese imports. We'll besides look astatine Tesla's continuing decay successful Europe, and Rivian's nonstop income efforts successful Ohio. 

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Ford builds its cars here, nan measurement nan Trump administration's tariffs are meant to encourage. You'd deliberation this would mean nan institution saves money connected tariffs, but you'd beryllium incorrect — Ford shells retired plentifulness for taxes connected nan materials and parts it brings successful from abroad. From nan Wall Street Journal:

Ford Motor, nan second-largest American carmaker, prides itself connected making astir of its vehicles successful nan U.S. Some 80% of nan cars Ford sells successful nan U.S. are built there, and it makes much vehicles successful nan U.S. than immoderate different automaker.

But nan Dearborn, Mich., institution said nan Trump administration's latest waste and acquisition deals pinch Japan, nan European Union and South Korea put it astatine a disadvantage pinch overseas rivals. Those deals now group a 15% tariff rate, which is little than nan 25% car tariff that went into effect this spring.

Ford faces steeper tariffs connected galore parts arsenic good arsenic higher costs for imported aluminum, which is taxable to 50% duties. Ford, 1 of nan industry's biggest users of aluminum, buys nan worldly from U.S. suppliers who walk connected a chunk of their tariff costs.

The only measurement to dodge tariffs is to excavation each your earthy materials successful nan United States, and to acquisition each measurement of nan process betwixt "ore" and "Mustang" wrong our borders — oh, and only utilizing tooling and machinery that, too, is built successful nan States. Which itself must beryllium built pinch machinery made here. You spot nan issue. 

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While American automakers are struggling nether nan Trump administration's tariffs, though, overseas automakers are... besides struggling. Honda and Toyota are expected to study anemic numbers this week, and things whitethorn get worse earlier they get better. From Reuters:

Toyota Motor and Honda Motor are expected to study weaker first-quarter net this week, arsenic U.S. import tariffs and a stronger yen measurement connected profits contempt coagulated request for hybrids successful their biggest overseas markets.

Japanese automakers look increasing uncertainty successful nan U.S., wherever tariffs connected imports are pushing up conveyance prices and testing nan resilience of user demand. Investors will beryllium watching for clues connected really Japan's 2 largest automakers are offsetting specified burdens.

Toyota, nan world's top-selling automaker, is forecast to station a 31% year-on-year driblet successful operating profit to 902 cardinal ($6.14 billion) yen connected Thursday, according to nan mean estimate of 7 analysts polled by LSEG. That would people its weakest quarterly consequence successful much than 2 years.

Honda is expected to study a 36% diminution successful operating profit to 311.7 cardinal yen connected Wednesday, its 2nd consecutive quarterly drop. The automaker has already forecast a 59% autumn successful full-year profit.

That mention of "testing nan resilience of user demand" is a large one. Tariffs person raised car prices crossed nan board, and nan U.S. authorities is working overtime to hide information connected really collapsed and unemployed Americans really are. If prices can't drop, and consumers can't spend nan product, don't expect income to rise. 

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Tesla, nan institution that erstwhile built electrical cars for Leonardo DiCaprio and now makes mediocre diner nutrient for guys who are acrophobic of seed oils, is having a bad time. Its income person Autopiloted disconnected a cliff, pinch galore would-be buyers crediting CEO Elon Musk's difficult correct governmental pivot for their abrupt deficiency of liking successful backing his whims via a car company. The numbers show they're not alone. From Bloomberg:

Tesla Inc. continues to station steep income declines successful Europe's biggest electrical conveyance markets, wherever nan Elon Musk-led automaker is ceding important stock to China's BYD Co.

In some Germany and nan UK — by acold nan 2 starring countries for battery-electric conveyance registrations successful Europe — Tesla's July income fell by much than half compared pinch a twelvemonth ago, according to figures reported Tuesday. BYD, by contrast, much than quadrupled registrations successful each country.

Last week, nan nationalist car relation for France — nan No. 3 marketplace successful Europe by EV income — reported that Tesla's registrations dropped 27% successful July and were down almost 40% done nan first 7 months of nan year.

Now I'm conscionable a humble automotive journalist pinch a grade successful business, but I would telephone these trends "bad." Perhaps moreover "concerning" if nan institution has immoderate liking successful continuing to make cars. 

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Ohio bans nonstop income of cars, unless your car comes from Tesla. Rivian, a institution that is notably not Tesla, has immoderate issues pinch this. Now, it's bringing those issues to court. From Automotive News:

Rivian has sued Ohio complete a 2014 rule that blocks nan electrical conveyance shaper from trading straight to consumers, citing a typical exemption granted to Tesla, a cardinal rival.

In a suit revenge Aug. 4, Rivian argues nan direct-sales prohibition is unconstitutional and stifles title by shielding Ohio's franchised car dealers from caller marketplace entrants.

"The State of Ohio has nary morganatic liking successful blocking its citizens from purchasing vehicles done a Rivian-owned dealer-license location successful Ohio," nan suit said.

"It reduces competition, decreases user prime and drives up user costs and inconvenience — each of which harm consumers — pinch virtually nary countervailing benefit," nan suit said.

I'm inclined to work together pinch Rivian here. Having worked astatine a dealer, they're really not basal arsenic middlemen successful each automotive transaction. 

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