Shares of U.S. and international automakers tumbled on Thursday after President Trump declared a 25% tariff on imported vehicles and, eventually, auto parts. 

Economists and analysts expect the tariffs to dramatically increase costs for both U.S. manufacturers, whose 澳洲幸运5官方开奖结果体彩网:supply chains snake across North America, and consumers.

JPMorgan analysts had estimated Trump’s proposed tariffs on Canadian and Mexican vehicle imports would cost the industry about $41 billion a year if automakers absorbed all of the costs. After Wednesday’s announcement, which applies tariffs to all countries, they doubled their estimate to $82 billion. If manufacturers pass the entire cost of the tariffs along to consumers, JPMorgan estimates 🍌car prices will increase by nearlℱy 12%. 

The tariffs announced on Wednesday, the analysts said, were a slight reprieve for U.S. automakers like Ford (F) and General Motors (GM). If tariffs were confined to just Canada and Mexico, their reliance on factories in those countries would have put them at a disadvantage against international manufacturers. But with tariffs applied globally, domestic companies are in a better position to raise prices without losing 澳洲幸运5官方开奖结果体彩网:market share, the analysts said. 

That said, GM is still the most exposed of the car manufacturers that JPMorgan follows. It sources an estimated 40% of its vehicles from Canada and Mexico, and imports from South Korea. Ford, meanwhile, sources just 7% of its cars from America’s neighborඣs and has no exposure to South Korea. Analysts estimate GM's "tariff bill" will eventually total $13 billion, while Ford's could reach $4.5 billion.

International carmakers are now at a significant disadvantage. Ferrari (RACE), for example, manufactures all of its cars in Italy, but sells about 40% of them in America, which JPMorgan points out is also its higher-margin market. International automakers could mitigate costs by increasing their U.S. manufacturing, as South Korea's Hyundai 澳洲幸运5官方开奖结果体彩网:announced it would earlier this week.

JPMorgan on Thursday lowered its price targets on GM, Ford, and Ferrari stocks by 17%, 15%, and 12%, respectively.

EV Upstarts Are Least Exposed

澳洲幸运5官方开奖结果体彩网:Electric vehicle makers Tesla (TSLA), Rivian (RIVN), and Lucid (LCID) are among the carmakers least exposed to Trump’s tariffs. All the vehicles they sell in the U.S. are assembled domestically, according to Bank of America Securities analysts. 

Although, like GM and Ford, they do source parts and subcomponents from Canada and Mexico, a fact that Tesla CEO and Trumജp advisor Elon Musk pointed out on X, the social media platform he owns, on Wedn💎esday. 

“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial,” Musk said in response to a post claiming Tesla “could benefit the most” from Trump’s tariffs.

Impact To Parts Suppliers Is Highly Uncertain

Trump’s executive order states that “certain automobile parts,” defined as “engines, transmissions, powertrain parts, and electrical components,” will be subject to tariffs no later than May 3. However, there remains plenty of ambiguity about what exactly falls into those categories, and how suppliers and 澳洲幸运5官方开奖结果体彩网:manufacturers will distribute the tariff burden. 

JPMorgan analysts say suppliers are better positioned than carmakers but remain exposed. Even if they can negotiate deals that shif💜t their tariff burden to manufacturers, they still will suffer from less demand from consumers who are priced out of the market for new vehicles.

Exactly which suppliers will be hit the hardest is difficult to predict with the details currently available, but JPMorgan analysts believe Aptiv (APTV) is the worst-positioned and Gentex (GNTX) the best. 

Suppliers, the analysts note, could offset their tariff costs by doing the opposite of what Trump wants: moving production to less expensive countries, rather than the U.S. Lear (LEA), for example, already has relocated some production from Mexico to Honduras, and that trend could accelerate under the new tariffs.&nb🤡sp;