Automobile Manufacturers NAICS 336110

Oct 13, 2025 - The EV Race Slows Down in the US

• Battery-powered cars will make up half of all US auto sales by 2039, according to a forecast by consultancy EY, a delay of five years from previous projections. The adjusted forecast reflects a changed political reality with regards to Electric Vehicles (EVs) as the Trump administration eliminated EV targets for automakers and cancelled a $7,500 consumer tax credit for buying an EV. The US now stands to fall behind other countries in the EV race, particularly China. US consumers had already been skeptical of EVs due to their high price and a lack of sufficient charging infrastructure across the country. As a result, EY expects that market penetration for EVs will stay relatively flat at 11% of US auto sales in the next four years, up from 8.1% in 2024. By contrast, EVs are forecasted to make up 70% of auto sales in China by 2039.
• Global automakers have lost about $12 billion so far in 2025 from the Trump administration’s worldwide trade war, according to The Wall Street Journal. The 10 largest car makers expect their net profits to fall about 25% this year to the lowest levels since the pandemic. Toyota took the biggest hit with operating profits dropping by $3 billion, the largest of any auto manufacturer. Most auto companies have not yet raised prices (with exceptions such as Ford) for fear of alienating customers and angering the White House. General Motors hopes consistent pricing will keep customers happy and coming to the lot and offset some of its tariff costs. Trump’s demand that more cars be made in America to avoid tariffs is extremely complicated, in that supply chains for huge manufacturers can’t be easily changed or built quickly.

• A US trade war with China is affecting car manufacturers in numerous ways, with one of the most challenging being China’s near total control over rare-earth magnets necessary for electric vehicle (EV) manufacturing and certain traditional car systems (and virtually all other electronics). China controls 90% of rare earth metals such as dysprosium and terbium, elements used in magnets so they operate at high temperatures. Exports of rare-earth magnets from China have all but halted since April amidst the tariff squabble with the Trump administration. Auto manufacturers worry they can’t keep production lines moving without the magnets and might have to shut down production. Some are considering outside-the-box solutions including shifting all engine production to China, or shipping American-made EV engines to China so the magnets can be installed. Any of those options will run afoul of Trump’s trade goals and would significantly increase costs already high due to tariffs.
• The Trump administration slapped 25% tariffs on all imported automobiles on April 2, claiming the levies will spur auto factory building in the US. The tariffs will apply to all imported passenger cars and light trucks. Certain auto parts will also be subjected to the levies such as engines, electrical components, and powertrain parts. This is in addition to reciprocal tariffs Trump also levied against specific countries that are key US partners in auto manufacturing. According to Cox Automotive, the tariffs will increase the price of imported passenger vehicles by an average of $6,000. In 2023, the US imported about $120 billion worth of automotive products from Mexico and Canada - roughly half of all US vehicle and parts imports. The move will likely spur retaliatory tariffs from other countries against the US, potentially driving auto prices even higher.