White House’s latest tariff relief seems great for Tesla, dismal for other automakers
Tariff exemption is coming for automakers, or at least for their vehicles made from 85% US content.
The news comes ahead of an expected announcement of additional relief for automakers in the form of exemptions from non-sector tariffs like those on steel and aluminum.
For a year, cars that are made with at least 85% domestic and USMCA-compliant content will be able to apply for full reimbursement from tariffs, according to a Wall Street Journal report that cited a senior US official. After a year, that percentage goes up to 90%.
Though many automakers are pledging to increase domestic manufacturing, billions of dollars’ worth of auto parts are still imported by the companies every year. Tesla appears to have the easiest path to reaching 85% US content, with an average share of 81% in 2024. The next closest automaker is Honda, with an average of 63% US parts for vehicles sold in the US, according to American University research.
Certain models of Ford’s Mustang GT and Honda’s Passport SUV are also close to the threshold.
Auto investors don’t seem exactly thrilled about the news, with manufacturers including Ford, Stellantis, and Toyota edging slightly higher on Tuesday afternoon, while GM fell after it reported earnings.
