Tariffs causing major setbacks in automaker production planning — S&P Global Mobility

Vehicle pricing isn’t the only thing taking a hit from the auto tariffs—with a new analysis revealing that the levies are also having a major impact on product planning.

The details:  Michael Robinet, vice president for forecast strategy at S&P Global, contends that President Donald Trump’s on-again and off-again approach with the tariffs is causing suppliers and automakers to lose at least 18 months of forward planning.

• The 25% tariffs on vehicles manufactured in Canada and Mexico seek to get automakers to move their production to the U.S.—but the shift is difficult to achieve in the short amount of time given, says Robinet.

• Asian automakers including Toyota, Honda, and Hyundai don’t even have enough manufacturing capacity in the U.S. to accommodate the number of vehicles they sell in the U.S. market, notes Robinet. 

• Nissan is the only Asian automaker with enough capacity in the U.S. to support a shift in its production—but the current market demand for Nissan vehicles is low in the U.S. compared to its competitors.   

Why it matters: Automakers need years to plan new models, but Trump's unpredictable tariff policies are forcing them to constantly change course. This likely means fewer new vehicles coming to market, less inventory for dealers, and potentially higher prices as companies scramble to move production or eat the costs.

Between the lines: Trump’s approach to the tariffs could yield huge benefits for one group of automakers in the business when it comes to product planning, explains Robinet—that group being Chinese car companies. 

• The levies are poised to have a major impact on the battery electric vehicle market—especially for Western automakers—when trying to compete globally with Chinese companies like BYD 

• China controls 90% of the processed rare-earth metals required for batteries and motors—which significantly impacts Western automakers’ BEV planning and ability to be competitive in the sector.  

Bottom line: The auto tariffs are disrupting far more than just pricing—they're throwing a wrench into long-term product planning. And as some automakers work to try to shift their production to the U.S. to adapt to the levies, Chinese companies like BYD are likely charging up to take advantage of the chaos in the global EV sector.

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