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Tariff Trouble: Automakers Have Been Tight-Lipped About the Reasons Behind Recent Price Increases
Facing uncertainty with tariffs, automakers have begun slowly raising prices on new vehicles, but they’re going out of their way not to associate the price increases with President Trump’s trade actions. Several factors are driving this decision, including automakers’ efforts to avoid the president’s attention and manage customers’ perceptions of new car pricing.
Facing uncertainty with tariffs, automakers have begun slowly raising prices on new vehicles, but they’re going out of their way not to associate the price increases with President Trump’s trade actions. Several factors are driving this decision, including automakers’ efforts to avoid the president’s attention and manage customers’ perceptions of new car pricing.
Edmunds’ head of insights, Jessica Caldwell, told Automotive News, “There is a risk that people will automatically assume the price increase is 25 percent versus a 2 percent increase. Consumers have these numbers pre-assigned in their brain from the news, but the automakers won’t generally pass on the whole amount – at least not in the beginning.”
Some companies have committed to holding prices steady or offering employee pricing, including Ford, Hyundai, and others, but those raising prices are doing so under the radar. They don’t want to raise the president’s blood pressure by calling out the tariffs, but many are eying what could be significant impacts from the tariffs.
The price increases have started smaller, with two to three percent jumps for some models, as automakers try to feel out the situation. Their suppliers will also absorb some of the hit, though their margins are generally much thinner than automakers’, making it more difficult to absorb tariff shocks.
[Images: Nissan, Ford, Tesla]
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