President Trump’s 25% tariff on imported cars threatens to slow U.S. electric vehicle adoption by raising prices and complicating supply chains dependent on China.
David Ferris and Benjamin Storrow report for E&E News.
In short:
- The tariffs target imports crucial to the EV supply chain, especially batteries, which are largely sourced from China; this puts pressure on automakers who already lose money on most EV sales.
- Tesla, which manufactures most of its vehicles and parts in North America, is well-positioned to weather the tariffs and could regain market share despite rising material costs.
- Automakers like Honda and Hyundai may benefit in the long run thanks to Biden-era investments in U.S. EV manufacturing that are just now coming online.
Key quote:
"Anything that’s going to potentially increase the price of a vehicle comes out of consumers’ pocket. It’s just going to hurt overall."
— Stephanie Valdez Streaty, analyst at Cox Automotive
Why this matters:
Electric vehicles industry, which remains heavily reliant on global supply chains, are now caught in the crossfire of renewed trade tensions with China. As President Trump reimposes or expands tariffs on key imports, including critical EV components like batteries and raw materials such as graphite and lithium, automakers face rising costs that could slow the transition away from fossil fuels. Tariff-driven inflation may place these vehicles out of reach for many Americans — particularly those outside the luxury market. Environmental advocates worry that the added costs and uncertainties may weaken momentum at a time when the U.S. is just beginning to scale EV adoption, with serious implications for climate goals and air quality improvements.
Related: Elon Musk leverages ties with Trump and Xi for Tesla’s success
