Trump's Tariffs Could Add Over $10,000 To New Car Prices

Good morning! It's Monday, February 24, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you'll find the most important stories that are shaping the way Americans drive and get around.

In this morning's roundup, we're going to take a look at how President Trump's planned tariffs could impact car prices and why the agency in charge of managing federal buildings is taking down hundreds of EV charging stations. We're also discussing how Honda is dropping General Motors from its next-generation hydrogen fuel cell plans and another bit of bad news for Nissan.

In more good news for Trump supporters whose main goal is to make everyone's life a bit worse, a notable Michigan economics group is predicting President Trump's tariffs would have a bigger impact on the U.S. auto industry than the 2023 United Auto Workers strike, and it would harm the industry for a much longer period. 

Michigan-based Anderson Economic Group projects that new-vehicle costs could rise anywhere between $1,000 to $9,000, but it's more likely to be on the higher end of that spectrum, especially for full-size SUVs with substantial parts of it built in Mexico. Analysts warn that the price increases could actually crest $10,000 if automakers have to make production adjustments or shut down lines. That's very America First. That's very Dark MAGA. From the Detroit Free Press:

Patrick Anderson, CEO of Michigan-based Anderson Economic Group, said Friday on an Automotive Press Association webcast that tariffs would add punishing costs for American automakers.

"This is why Jim Farley said tariffs could blow a hole" in the U.S. auto industry, he said. "You cannot absorb those costs and stay in business making the same products."

The Ford CEO warned investors on Feb. 11, the night before traveling to Washington, D.C. to meet with members of Congress on President Donald Trump's proposed tariffs. Trump also put 25% tariffs — the taxes charged on goods as they cross country borders — on steel and aluminum imports, but the proposed tariffs on goods from Canada and Mexico threatened earlier in his administration have yet to be enacted. He said earlier this week that he expected auto tariffs of 25% to be imposed April 2.

To assess the impact, Anderson Economic Group looked at selected models assembled abroad, the content likely within vehicles and then the direct costs of each layer of tariffs — 25% on Canada and Mexico and 10% tariffs on China. The result would turn today's already egregious auto affordability concerns into a joke.

[...]

When Trump first announced tariffs on Feb. 1, it was through an executive order citing the Emergency Powers Act, the first time in history an emergency power had been used to impose tariffs.

"This has been used with rogue regimes before, not with trading partners," Anderson said. "Statutory authority here is doubtful."

However, any tariffs enacted through the Trade Expansion Act, known more commonly as Section 232, would be far more likely to stick and could lead to massive layoffs across the industry.

Renegotiation of the U.S.-Mexico-Canada Agreement is also possible. The timeline for that is 2026, yet Anderson said the clock started ticking on this lever on Inauguration Day. 

Right now, the Big Three automakers are closely following how tariffs on foreign vehicles will mess with their business. Last week, GM's CFO said the company would have to consider moving plants if the tariffs became permanent.

It has also led to several automakers delaying vehicle launches, according to Freep. Ford has pushed back the launch of its next-generation F-150 and Stellantis said it's delaying Jeep Compass production in Canada as it reassesses its North American production strategy. 

Things are going great, guys!

An agency that manages buildings owned by the federal government, called the General Services Administration, is planning to shut down all of its electric vehicle chargers across the country, saying that they are "not mission critical." The GSA is also looking to offload newly purchased EV fleet vehicles, and they're certainly going to lose a lot of money on every single one. If that isn't wasteful, I don't know what is.

Right now, the GSA operates several hundred EV chargers across the country, accounting for about 8,000 plugs that are available to government-owed EVs as well as federal employees' personally owned vehicles. From the Verge:

The official guidance instructing federal workers to begin the process of shutting down the chargers will be announced internally next week, according to a source with knowledge of the plans. Some regional offices have been told to start taking their chargers offline, according to an email viewed by The Verge.

"As GSA has worked to align with the current administration, we have received direction that all GSA owned charging stations are not mission critical," the email reads.

The GSA is working on the timing of canceling current network contracts that keep the EV chargers operational. Once those contracts are canceled, the stations will be taken out of service and "turned off at the breaker," the email reads. Other chargers will be turned off starting next week.

"Neither Government Owned Vehicles nor Privately Owned Vehicles will be able to charge at these charging stations once they're out of service," it concludes.

Under the Biden Administration, the GSA was at the head of the president's plan to phase out the federal government's use of gas-powered vehicles, replacing them with EVs. It currently owns about 650,000 vehicles, and more than half of them were going to be replaced with EVs. Of course, those EVs would need somewhere to charge, and that's why Biden's Inflation Reduction Act included $975 million for the GSA to upgrade federal buildings across the country with "emerging and sustainable technologies." The aim was to get to net-zero emissions at federal buildings by 2045. Of course, with Trump that plan is completely out the window because of woke or whatever.

According to a March 2024 update, the GSA had ordered over 58,000 EVs and begun installing more than 25,000 charging ports, adding to the 8,000 already in use across the government. An interactive map showing the location of all GSA-owned chargers has been taken offline as of February this year. (An older version is available through the Wayback Machine.)

The GSA will also begin offloading the EVs it purchased under the Biden administration, the source said. It's unclear whether those vehicles will be sold or simply put away in storage. It's also unclear whether other federal agencies will be making similar decisions for their own EVs, although many of those agencies tend to use the GSA's EV chargers for their own plug-in vehicles.

Good lord, this is all too stupid for words.

Honda and General Motors will go their separate ways when it comes to developing and manufacturing next-generation hydrogen fuel systems. The Japanese automaker made the announcement late last week at the International Hydrogen & Fuel Cell Expo in Tokyo while it was unveiling its upcoming fuel cell system. Honda says the new setup achieves double the durability and triple the volumetric power density at half the cost of its current system that it developed with GM.

The new unit apparently has greater power density than the old system, meaning it can be more compact so it can fit into different layouts and applications. Honda says it's rated at 150 kW, nearly double the 78 kW the unit it produced with GM put out. From Automotive News:

Today's fuel cell system is manufactured in Brownstown Township, Mich., at a GM-Honda joint venture. That operation began in January 2024. The partners targeted output of some 2,000 systems annually for Honda. The system is used in the CR-V e:FCEV, a hydrogen-powered version of the popular crossover made at Honda's Performance Manufacturing Center in Marysville, Ohio.

But in the fiscal year ending March 31, 2028, Honda says it will begin manufacturing the new, in-house fuel cell system in Japan at a new plant being built in Moka, a city just north of Tokyo in Tochigi prefecture. The facility will be on the site of an old, unused powertrain factory.

It will have capacity for 30,000 fuel cell systems a year, Honda said.

"The fuel cells that are being jointly developed with GM for use in stationary power sources and CR-Vs will continue to be manufactured in a joint venture with GM," spokesman Tsubasa Yoshioka said. "As for whether we will provide GM with the technology for the next-generation fuel cell announced this time, we have no plans to do so at this time."

A person familiar with GM's planning confirmed that the two companies have no plans to collaborate on a next-generation system but said that the sides are still talking about technological collaborations and could eventually circle back on fuel cells in the long run.

"GM and Honda continue to work together to manufacture fuel cells in Brownstown Township and we continue to discuss collaboration opportunities," a GM spokesperson said in an e-mail to Automotive News.

Don't worry about GM, though. In September of 2024, the automaker said it would team up with Hyundai for hydrogen tech. Under the partnership, Hyundai agreed to supply GM with electric commercial vehicles. A production cooperation could be announced as early as March as well.

I don't know if hydrogen will ever work out on a consumer level, but the tech is very neat, so I hope automakers continue to work at it.

Moody's is giving Nissan another problem to deal with. The credit rating company cut Nissan's debt rate to "junk" status just days after the automaker's planned merger with Honda fell apart. At the end of last week, Moody's downgraded Nissan's senior unsecured ratings by one level, from Ba1 to Baa3 — its lowest investment grade. From the Wall Street Journal:

Moody's said the rating action reflects Nissan's weak profitability driven by slowing demand for its aging model portfolio. A slowdown has been evident in China, but now the carmaker faces challenges in the U.S. market as well, it said.

The ratings company said the negative outlook took into account the risks associated with implementing the carmaker's new restructuring plan.

Nissan, in November, revealed a restructuring plan that included cutting 9,000 jobs and reducing its global production capacity by a fifth.

Last Thursday, Nissan and Honda officially canceled their planned merger, less than two months after announcing it. This has placed additional pressure on troubled Nissan, which may now need to seek alternative partnerships. Analysts believe the company will likely look for assistance in strengthening its finances and developing new technology.

Nissan also projected a net loss for the fiscal year ending in March, as it undertakes restructuring efforts to address weak sales.

The carmaker reported having more than 2 trillion yen, equivalent to $13.37 billion, in cash and unused credit lines exceeding ¥1.7 trillion in its auto business, as of the end of December.

This isn't the first time Nissan's credit rating has dropped. S&P Global Ratings downgraded Nissan's long-term issuer credit to BB+ in March of 2023. That placed it below investment grade. In January of this year, S&P revised its Nissan outlook from negative to stable but maintained the same rating. 

On this day in 1836, Colonel William Travis called for help on behalf of the Texan troops defending the Alamo. Here's what happened next, according to History.com:

A native of South Carolina, Travis moved to the Mexican state of Texas in 1831. He soon became a leader of the growing movement to overthrow the Mexican government and establish an independent Texan republic. When the Texas revolution began in 1835, Travis became a lieutenant-colonel in the revolutionary army and was given command of troops in the recently captured city of San Antonio de Bexar (now San Antonio). On February 23, 1836, a large Mexican force commanded by General Antonio Lopez de Santa Anna arrived suddenly in San Antonio. Travis and his troops took shelter in the Alamo, where they were soon joined by a volunteer force led by Colonel James Bowie.

Though Santa Anna's 5,000 troops heavily outnumbered the several hundred Texans, Travis and his men determined not to give up. On February 24, they answered Santa Anna's call for surrender with a bold shot from the Alamo's cannon. Furious, the Mexican general ordered his forces to launch a siege. Travis immediately recognized his disadvantage and sent out several messages via couriers asking for reinforcements. Addressing one of the pleas to "The People of Texas and All Americans in the World," Travis signed off with the now-famous phrase "Victory or Death."

Only 32 men from the nearby town of Gonzales responded to Travis' call for help, and beginning at 5:30 a.m. on March 6, Mexican forces stormed the Alamo through a gap in the fort's outer wall, killing Travis, Bowie, Davy Crockett and 190 of their men. Despite the loss of the fort, the Texan troops managed to inflict huge losses on their enemy, killing at least 600 of Santa Anna's men.

The defense of the Alamo became a powerful symbol for the Texas revolution, helping the rebels turn the tide in their favor. At the crucial Battle of San Jacinto on April 21, 910 Texan soldiers commanded by Sam Houston defeated Santa Anna's army of 1,250 men, spurred on by cries of "Remember the Alamo!" The next day, after Texan forces captured Santa Anna himself, the general issued orders for all Mexican troops to pull back behind the Rio Grande River. On May 14, 1836, Texas officially became an independent republic. Texas joined the Union in 1845.