Driving the news: Car buyers are about to get hit with nearly $2,000 in extra costs per vehicle as automakers pass Trump's tariff expenses along to consumers, AlixPartners warns in a new study.
For context: The consulting firm expects companies to dump 80% of the $30 billion tariff burden on buyers, which will knock about 1 million vehicle sales out of the market over three years. GM and Ford are already bracing for $5 billion and $2.5 billion hits respectively this year.
Why it matters: AlixPartners thinks the tariff pain is temporary—they expect rates to drop from 25% to 7.5% as trade deals get worked out, reports Bloomberg. But killing EV incentives like the $7,500 tax credit will do lasting damage. The firm just slashed its U.S. electric vehicle forecast from 31% to 17% by 2030, with gas engines now expected to keep half the market instead of fading to one-third.
What we're watching: Sales should recover to 17 million vehicles by 2030, but the composition will look very different. Traditional hybrids are gaining ground as consumers seek alternatives between gas and full electric, while plug-in hybrids are losing appeal.
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