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Runtime: 9:13
0:00 Auto Industry in Trump Tariff Turmoil
0:33 BMW, Mercedes Want Peace with Trump
0:58 VW Could Build Audis, Porsches In U.S.
1:27 VW Cancels ID.7 For North America
1:49 GM Stock Drops 9% On Tariff Worries
2:27 Adient Will Pass Tariff Costs to Automakers
2:54 Trump Tariffs Could Push Car Prices Up $10,000
3:57 New U.S. Transportation Sec Dumps Biden MPG Rules
4:34 CARB Withdraws Request for HD Truck Regs
5:18 U.S. January Car Sales Up 7.5%
6:07 Honda Claims Nano-Ribbon Breakthrough
6:57 Tesla Uses FSD To Move Cars to Shipping Docks
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
Sean is out at a media event today and I’m filling in for him.
AUTO INDUSTRY IN TRUMP TARIFF TURMOIL
We start out the show today with the auto industry in complete turmoil over President Trump’s threat to slap 25% tariffs on imported cars. While most of the focus has been on Mexico and Canada, the tariffs will likely go on all imported vehicles and the Europeans in particular are really nervous.
BMW, MERCEDES WANT A PEACE PIPE WITH TRUMP
Oliver Zipse, the CEO of BMW, says the European Union should cut the tariffs on cars imported from the U.S. from the current 10% rate down to 2.5%, which is what the U.S. tariff on European cars is. Ola Kallenius, the CEO of Mercedes-Benz, says the EU should reach a grand bargain with the Trump Administration to avoid a trade war.
VW COULD BUILD AUDIS, PORSCHES IN U.S.
Meanwhile, Volkswagen, to avoid paying tariffs, is reportedly looking into building Audis and Porsches at its assembly plant in Chattanooga, Tennessee, which has excess capacity. The new Scout plant that’s getting built in South Carolina could also be used to make Audis. But let’s not fool ourselves. Even though this is physically possible, it would definitely drive up overall costs for VW, Audi and Porsche.
VW CANCELS ID.7 FOR NORTH AMERICA
And as a side note to all this, Volkswagen officially cancelled plans to sell the ID.7 electric sedan in the U.S. and Canada. Dealers worried that the price would be too high and volume too low. Though VW never announced pricing for North America, the ID.7 sells for about $55,000 in Europe.
GM STOCK DROPS 9% ON TARIFF WORRIES
General Motors is also feeling the Trump Tariff pain. Even though GM’s earnings report yesterday beat Wall Street expectations, its stock price took a 9% nosedive largely because GM didn’t provide any guidance on how the tariffs will impact the company and what it will do about it. Of course, you really can’t blame GM too much. Nobody really knows what’s going to happen, or when. And while GM is undoubtedly war-gaming all kinds of scenarios, you don’t want to publicly say what you’re going to do until you know what you’re going to do.
ADIENT WILL PASS TARIFF COSTS TO AUTOMAKERS
But here’s one company that knows exactly what it’s going to do. Jerome Dorlack, the CEO of Adient, the seat supplier, says there’s no way it’s going to eat the cost of those tariffs. He’s warning automakers that he’ll pass that cost directly on to them. Dorlack says Adient is in constant contact with the car companies over this issue, sometimes on an hourly basis.
TRUMP TARIFFS COULD PUSH CAR PRICES UP $10,000
Trump is supposedly going to announce the tariffs this Saturday. If that happens, watch for car prices to go up significantly. Even if the tariffs are phased in over a number of months, the impact will be immediate. Think about it. The average price of a car today is nearly $50,000. That’s the retail price. Let’s say the factory price is $40,000, before shipping costs and dealer markup. A 25% tariff on the factory price would boost the cost of that car by $10,000. And that kind of price increase will push tens of thousands of consumers out of the market, especially those with low credit scores who will no longer qualify for a loan or a lease.
NEW U.S. TRANSPORTATION SEC DUMPS BIDEN MPG RULES
We reported a couple of weeks ago that Sean Duffy would be the new Secretary of Transportation in the U.S., and yesterday the Senate made it official. It voted 77 to 22 in favor of appointing him. And Mr. Duffy didn’t waste any time. He immediately signed an order directing regulators to rescind the Biden Administration’s fuel economy standard of 50.4 miles per gallon by 2031. The standard is currently at 39.1 MPGs and it will probably hover there for the rest of the Trump Administration.
CARB WITHDRAWS REQUEST FOR HD TRUCK REGS
And the California Air Resources Board sees the writing on the wall. The CARB just withdrew its request to the EPA to set tougher emission rules for heavy-duty trucks and force trucking companies to buy fully-electric trucks. However, California still has a rule in place that forces manufacturers to sell a growing number of zero-emission trucks each year. So truck makers are forcing dealers to sell a certain number of electric trucks in order to meet the standards and if the dealers don’t hit that goal, the manufacturers won’t ship diesel trucks to them. And this could wreak havoc on the California heavy truck market.
U.S. JANUARY CAR SALES UP 7.5%
Despite all the worries about the Trump Tariffs, they haven’t hit yet, and for the moment S&P Global says new car sales look pretty good for January. It predicts that U.S. customers will buy 1.1 million vehicles this month, up about 7.5% from last year. That puts the SAAR at 16.2 million vehicles for the year, which is a decent number, but still a million vehicles less than what sales were, pre-Covid. S&P Global also says BEVs should hit 9% market share, which is also decent. But it could also turn out that people are rushing to buy cars now before the tariffs hit, and rushing to buy EVs before the $7,500 subsidy goes away.
HONDA CLAIMS NANO-RIBBON BREAKTHROUGH
Honda says it achieved a breakthrough in quantum materials that could make sending communications more secure. Scientists at the Honda Research Institute USA developed a new method to create a “nanoribbon” material that is just a single atom thick and only tens of atoms in width. When excited by a laser, the nanoribbon material emits light that can carry encoded information to create a physical layer of ‘quantum secure communication’ that can immediately detect any attempt to intercept the communication. I.e., they can tell if anyone’s trying to hack it. It’s all pretty technical but if you’re interested in more details we’ve got a link in the transcript or description box.
TESLA USES FSD TO MOVE CARS TO SHIPPING DOCKS
And for the last segment in today’s show Tesla is showing off the capabilities of its autonomous technology at its Fremont plant in California. The company posted two videos on X that show Model 3s and Ys driving themselves without a human on board around the factory. The vehicles navigate a 1.2-mile route from the factory to loading dock lanes where they are then loaded onto trucks to head out for delivery. Tesla didn’t reveal any other details other than what you can see in the video but in the post, it did say this brings it “one step closer to large-scale unsupervised FSD.”
And that’s a wrap. Thanks for watching Autoline Daily, and if you haven’t done so, please subscribe to our YouTube channel, or sign up for the daily newsletter on our website.
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I’m sensing a anti-Trump agenda at Autoline….
I’m one of the people who “moved up” car buying, to avoid tariffs and likely chaos in the auto business. I bought a Prius in late November. I’m liking it, except for the poor visibility to the front corners due to the thick, and steeply angled A pillars.
I’m sure both BMW and Mercedes would like to avoid a trade war, because they have cars going both ways between North America and Europe. I think all, or nearly all BMW crossovers are made in Spartanburg, and while North America is their biggest market, a substantial number are exported around the world. The same applies to M-B, with expensive cars crossing the Atlantic both ways.
John,
With all the Trump tariff debacle, do you think any auto manufacturers may not survive?
Barry, I wondered the same thing. I always assumed that Stellantis would be the first auto OEM to go under, because it is not seen as American, French, Italian or German. Now I see it as more likely to cut up into several parts instead of going under. I suspect that Trump will ‘convince’ Stellantis to spin Chrysler off as an American company again, or at least stop sharing parts between US and Europe. In terms of going under, I actually see Tesla as most likely. Not because of sales issues but because it would be extremely easy for China to nationalize the Chinese parts and the EU to nationalize the European part. The 1/3 that remains might not be able to survive in the US during an anti-EV administration. I see it more likely to merge with Ford or Chrysler than go under and it might even keep the Tesla name, but who knows. Ford has a similar but smaller problem with a small Chinese branch, a larger but unprofitable Euro branch and a large US branch. I also predict that many of the smaller Chinese companies will go under or find themselves having to move to another country to maintain access to the US market. It’s only a small relocation from China to Laos, Cambodia, Thailand or even Australia to become the ‘native’ car company of that country. Canada and Mexico also have no native car companies and might be a good home for a smaller Chinese company assuming that the US does not absorb them as 2 additional states.
I have find something to be odd when I comes to new vehicles lately. I have seen TV and have received sale circulars in the mail, that have advertised “brand new” 2024 vehicles and lease deals. In the past it has been my experience, that they start selling the next year model year of a vehicle, at the end of the proceeding calendar year. Yet, my sister, who is at the end of her lease, has been looking for a replacement F-150, since last October and has been told by a number of different Ford dealers they are not on sell yet! She even asked to order a new ’25 back in October ’24, like she did with vehicle she has now and each of them said that Ford is not allowing customers to do so.
On top of that, she has observed F-150’s as old as ’23 on dealer lots, selling for nearly new vehicle prices! I told her that maybe Ford/dealers are trying to move out all of the inventory they have, before they let customers start purchasing from there ’25 vehicle bank. While that might sound reasonable to the dealer or an OEM, though, that does work out to the best interest of the customer. If they won’t sell ’25, because they have too many ’23s and ’24s, how is what they have left over on their vehicles, my problem as the paying customer?! The vehicle is going to depreciate the second I drive it off the lot after a purchase, so why would I want a brand new ’24, during the ’25 model year?
I just would if OEMs are holding back on ’25s, not knowing how tariffs will hit the final cost of vehicles that are shipped across US boards! Remember, it’s not just final assembly, but the various individual price for the parts that go into a vehicle that will be impacted by the tariffs too. Talk about unintended consequences! Should the tariffs go through and vehicle prices rise as much as John said today, even a100% tariff on a vehicle Chinese EV, may still in up being less expensive as vehicles made locally, as a result of the tariffs!
Hi John, good to see you back.
I have a few thoughts on the whole Tariff thing.
Let’s start with this. If these tariffs get put in place, we need to understand that IT WILL drive car prices up. I can’t imagine anyone is foolish enough to believe that it won’t. Car companies and suppliers won’t just absorb that cost. And given some parts cross the border(s) up to 6 times or more, a tariff at each crossing will undoubtedly raise prices even more. Even just imagine a 25% jump in the cost of an engine, or a transmission for a car. That ain’t chump change!
The other issue is, tariffs like this makes the US the least trustworthy trading partner in the world. Nobody else comes even close. Think about it. Who would want to do business with someone who will make up lies out of whole-cloth? And that is what Trump has done. Made stuff up.
As an example, there is no “Subsidy” going to Canada. Full stop. It’s called a trade deficit, and it’s there largely from Canadian heavy oil going south. And overall, we’re selling you things that YOU need. Things that YOU need, and can get cheaper by buying from us. That is not ‘unfair’ in any way.
Also worth remembering, much of that shipped oil gets refined and sold – for profit – to other countries. The gulf coast has entire plants built to handle heavier oils. As those plants can’t be quickly ‘flipped’ to refining lighter grades, this hurts both the US and Canada. So they’ll have to spend more on the supply of Canadian heavy oil (which they already get at a discount because it requires more refining), OR they have to spend more money to shift their plant to process lighter crude, and lose that profit they used to get refining the heavier stuff. They become ‘just another refinery’ processing the same product, and trying to sell it to the same market.
The other issue is, what is the end goal of the tariffs? Let’s say Trump’s move makes every OEM build all the cars they sell in the states, IN the states. Great! But then what? Who else is going to want them? There is no economy of scale, where the total US market is only 15.8M SAAR, AND with prices are about to go up which will further drive sales down. So what is the US going to do with the excess production capacity it will inevitably end up with? Export it? To whom?? Who is going to want to buy a US-built car in Canada, when the US just kneecapped the entire Canadian auto sector? Sure won’t be me, and I doubt many other Canadians will be happy with it either.
And at a larger scale, given the hostility and wild unpredictability of how the current US government is operating, who in the rest of the world would be even vaguely interested in importing one of their cars? To my thinking, if the goal is to open the rest of the world up to an flood of cars from China, Trump’s plan seems like a good one to make that happen! I can’t see any other outcome.
This also spreads to the regular retail side of the economy. Pretty much without exception, I and my friends are reading labels very closely at grocery stores. Anything that says “Product of the USA” is pretty much a sales repellant. It stays on the shelf. Even US companies that make their product in Canada are being passed over if there is a Canadian owned company producing a similar product. The fallout of the backwards moves by Trump are spilling out into other sectors, and I don’t see it stopping any time soon.
To close this off, I’ll go back to my earlier point. It is pretty clear that the US is now an entirely untrustworthy trading partner. Let’s hope that someone can talk sense into these people, and some form of sanity returns.
Canada should nationalize the GM, Ford and Chrysler facilities and turn them into one company, making a near full range of vehicles. Canada has one of the largest suppliers in Magna, which has could supply a lot of the needed parts.
That’s a socialist idea, having the Canadian government nationalize the auto factories. Forcing them into one company. This website is not what it should be .
Danny, that was not a very serious proposal. It’s clearly not going to happen, just as Canada is not going to become the 51st US state, or the 51st-60th.
@Danny @Kit. Just a thought. Though the notion of Canada just ‘claiming’ the manufacturing capacity in Canada, and making our own cars ‘might’ sound socialist to some, there is a detail that some are missing.
The reality is, Trump’s tariffs are EXACTLY a Socialist move. Trump is inserting himself into negotiated deals and contracts, between corporations, and is also inserting an income stream that goes directly to the government, that they will then use to run the government on. Seems pretty socialist to me.
The fact that none of that money will never go to help any of the poor and disadvantaged, is basically immaterial to the discussion. It seems like a socialist tactic used to promote isolationism.
If someone could remind me how isolationism went back in the 30’s, that would be ‘greaaat’. 😉
One thing we can be sure of, Trump’s tariffs are not what “Capitalism” used to look like.
The tariffs are more Trump/GOP wealth redistribution from low and middle income people to the very wealthy. Elon and Jeff need their tax cut.
The tariffs are meant to force Mexico and Canada to bend the knee on controlling their borders, something they should already be doing. All this wailing and gnashing and it’s really all they need to do.
Additionally, Biden had steel tariffs in place his whole term. I’m sure there were others. Where was the “it’s a tax” outrage? You don’t think other countries use tariffs to protect their industries? EU has a 10% tariff on US autos right now. So all of this crying is disengenuous.
Maybe if Germany, for example, had protected their own automakers a bit, Volkswagen wouldn’t be looking at selling entire production plants to China in their own damn country. How’s that for a slap? 1)Partner with CCP backed automaker. 2)Teach them all the complex manufacturing. 3)CCP sets up another automaker and steals your market with your own tech. 4) CCP ends VW partnership because useful idiot is no longer needed. 5) CCP buys the husk of VW. 6) Laid off VW workers say they’ll work for CCP company if it promises this, that, and the other. 7) CCP laughs and says nah, we’re good.
Trump “negotiated” the USMCA trade agreement with Canada and Mexico which he now threatens to ignore. Neither Biden, nor any other president has done anything like that. If the tariffs are implemented, it will seriously hurt the North American auto industry. Tariffs are taxes that raise the price of stuff, and disproportionately affect those with less ability to pay. As others have said, this is making the US the least trustworthy country in the world, re. trade agreements.
I haven’t been happy with the Government in general no matter which party is in charge, Trump scares me as did the last administration
We do have the right to complain but really we are just along for the ride. The billionaires and political elites are running things the way they want. Kit if I was to quick to criticize I apologize for that.
Why does it seem that no one from the Autoline staff is reading our comments these days? Take today for example, a number of commentors either asked questions of John or commented on something he said during the show, yet there is no response from Autoline. And this isn’t something new, I don’t know how many times I have asked Sean something in the comments just to have it ignored. Seems like the viewers are being taken for granted here, and if that is the case then I think it is time to get our automotive news elsewhere. What say you John and Sean? Feel free to comment during your next shows if you indeed actually see this comment.
@Ziggy. Don’t think that because Autoline doesn’t respond to a comment, that they don’t read the comments. I am sure they do. I have personally have had my comment repeated on the segment “From the Mail Bag”. And I am FAR from someone who gets quoted most often. So, yes, they do read them.
Also, the facts are, every OEM will have someone following these responses, to see where the zeitgeist lies. So it is far from just shouting into a vacuum.
The purpose of the comments is to get a sense of what people who have a sense of reality outside of the YT, and FB or especially “X” (I still call it Twitter) algorithms, actually think. This is a kind of show that pretty much bores the hardcore reactionaries, or entitled folks with an agenda. So in many ways, I believe that comments here should be viewed as much more credible. Especially compared to the ‘dogpile of idiots’ that happens on the other formats.
So, state your case. Word it well, and make your point. Even if it doesn’t result in a direct reply, this, more than maybe any other format, is probably the best place to express your thoughts. Autoline folks are no bozos.