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Automotive Stocks: The Effect of Tariffs on Shares of Popular Automakers
See how car stocks fare before and after auto tariffs start.
President Trump’s announcement of a 25% tariff on imported automobiles and parts on March 26, 2025, sent shockwaves through the automotive industry and financial markets — consumers are rushing to buy cars ahead of any potential price hikes, and investors are scrambling to assess the fallout.(1)
Tariffs like these are often seen as a direct hit to automakers’ bottom lines because they drive up production costs and disrupt global supply chains. While companies with robust US-based supply chains could, in theory, gain a competitive edge as rivals reliant on foreign components face higher costs, industry analysts believe this new tax will spare few vehicle manufacturers.(2)
From initial market reactions to longer-term trends, we assess how these new tariffs are impacting the stock prices of the industry’s biggest players. We dive into the real-world impact of these trade policies on automakers in different regions.
Impact on US automakers
It’s been a turbulent time for many US automakers including Lucid Group stock (Lucid Motors), General Motors (GM) and Tesla (TSLA).
Impact on European automakers
There have been no winners in the European auto-making market, with Ferrari (RACE), Polestar (PSNY) and Porsche (DRPRY) all seeing major downs since the tariff rollout.
Impact on Asian automakers
Asian auto makers have also seen major dips since the tariffs were implemented.
Impact on Middle Eastern automakers
Middle Eastern automakers have seen many ups and downs (mostly downs) since the tariff announcement.
What are tariffs?
Tariffs are taxes governments impose on goods entering or leaving a country, and they’re typically used to raise revenue, protect domestic industries or regulate international trade.(3)
Dating back thousands of years, tariffs have long been a tool of economic policy.(4) They gained prominence in the US with the US Tariff Act of 1789, which aimed to protect domestic manufacturing and generate revenue, and have seen a resurgence in use as a policy tool under the Trump Administration.(5)
Trump’s tariffs on automobiles
The Trump Administration announced on Wednesday, March 26, 2025, a 25% tariff on imports of automobiles and certain automobile parts, aiming to bolster US manufacturing and protect national security.(6)
The executive proclamation imposes a 25% tariff on all cars shipped to the US, effective April 3, 2025. Tariffs on key auto parts — engines, transmissions, powertrain parts and electrical components — will follow on May 3.(7)
The White House expects the auto tariffs to raise $100 billion in revenue annually.(8)
The impact of auto tariffs on stocks of different regions
According to Wedbush Securities Inc. analyst Daniel Ives, Trump’s automobile tariffs “will cause pure chaos to the global auto industry” and increase the average price of cars sold in the US by as much as $10,000.(9)
And that’s what we’re seeing so far when looking at share prices.
According to our data, automaker stocks across the board responded negatively to President Trump’s 25% tariff announcement, with US carmaker stocks seeing the largest decline on average.
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