People thinking of buying a car in America will now have to loose more pockets. Donald Trump’s new tariff policy can increase the price of every new car by about $ 2000. Its effect will appear not only on petrol and diesel vehicles but also on the electric vehicle market.
Cars will be expensive in America, Trump’s tariff impact starts
Customers planning to buy a new car in America will now have to be ready for more expenses. Due to US President Donald Trump’s new tariff policy, the price of cars in the country can increase by about $ 2000. This will have a direct impact not only on traditional vehicles but also on the sale of electric vehicles.
Elixparteners report has made several major revelations about this change, which mentions its impact on the auto industry, losses of companies and additional economic burden on customers.
Why are the prices rising?
This tariff is being implemented under Donald Trump’s “Make America Great”. Its main objective is to reduce American dependence on foreign cars and auto parts to promote domestic manufacturing in the country.
However, this decision will directly affect the pockets of American customers. According to the report, auto companies will collect about 80% of this additional cost from customers. That is, every customer will have to spend an average of $ 1760 on a new car.
Huge impact on auto sales
According to Elixparteners report, these tariffs may sell about 1 million (1 million) less cars in the US in the next three years. However, it is estimated that by 2030 the annual auto sales can reach 1.7 crore (17 million) units, but the damage by then will be difficult to compensate.
General Motors and Ford lost billions of dollars
American companies will be the biggest loss due to tariff policy. General Motors is estimated to have a loss of about $ 5 billion and Ford is about $ 2.5 billion.
These companies have planned to put prices burden on customers and partially compensate these ghats. However, its effect will remain limited and there will be pressure on sales in the market.
Electric vehicles will also get a big shock
If the Trump administration eliminates a tax credit of $ 7500 on electric vehicles, it will cause a huge shock to the EV market. Earlier, where it was expected that by 2030, EVs would become 31% of the total auto sales, now it is expected to be reduced to only 17%.
With this, customers can once again turn to petrol and diesel vehicles. This would be a major setback for EV manufacturers, which were already investing heavy in EV technology.
Return of ice vehicles
While the share of electric vehicles is expected to decrease, the demand for vehicles with internal combination engines is expected to increase again.
According to the report, the market share of ICE vehicles can increase from 33% to 50%. On the other hand, plug-in hybrid and extended range EV’s stake is likely to be reduced from 10% to just 6%.
Damage in global competition for America…
- Many countries around the world, especially China, are moving faster in electric vehicle technology. But due to this new policy in America, the country can be left behind.
- According to ElixPartons, American companies may have to resort to licensing or joint venture from China in future to develop EV technology.
- In this way, in an attempt to promote domestic production, the US may lag behind in the Global EV competition and its impact will remain on the US auto industry for a long time.
Increasing concern of customers
- Common American customers are already facing inflation. In such a situation, if the prices of cars increase further, then it will be more difficult to buy a car.
- This is a matter of concern, especially for middle class and youth because the prices of new technology and EV vehicles will increase further.
