Since President Donald Trump decided to turn the whole world upside down with his ill-advised and poorly conceived tariffs back in April of this year, automakers have — for the most part — sort of just sucked it up and absorbed the billions in added expenses they incurred. From mid-March to mid-August, the average vehicle MSRP rose less than 1%. Hell, even as model year 2026 vehicles start to roll out, they’re only seeing a modest 3.3% price increase, and that’s roughly equivalent to historical averages. However, as Trump’s tariffs stick around, don’t expect the generosity of OEMs to do the same.
I mean, it makes sense. This year alone, General Motors says it is going to incur a $5 billion gross tariff bill, and Ford is right behind it at $3 billion, according to Reuters. That’s a lot of money not going into the pockets of shareholders. For the time being, they’ve got some levers they can pull before foisting the cost onto customers, like asking suppliers or dealers to shoulder some of the load. I’m sure those discussions will go over well.
The reason automakers have yet to shaft their customers with tariffs is a simple one: they think higher prices will stop people from buying their cars, and they might be onto something with that one. Average transaction prices have jumped about 30% since 2019. As of today, the average new car will set you back $49,870, according to Automotive News. I’m not sure how much more the average person could stomach.
Different approaches
Right now, it seems like every automaker is taking its pricing strategies in different directions. Hyundai, which builds a hell of a lot of cars outside the U.S., says tariffs cost the Korean company about $600 million in the second quarter alone. GM says it added about $2,300 to the cost of every vehicle it built in June — domestic and imported.
It’s expected that most companies will gradually raise prices — focusing more on higher-priced models with bigger profit margins, according to Reuters. Though for some, those increases are already here. You just might not have noticed, as the outlet explains:
Automakers also have been subtly passing on some tariff costs to consumers without direct price increases, analysts and dealers said. For example, destination fees, which are essentially the delivery fees to the dealership, rose 8.5% for the 2025 model year, to $1,507, Edmunds found. This was a much more significant jump year-over-year than in the past decade.
We’ve obviously covered tariffs a lot over here at Jalopnik. In just the past few week, we’ve told you about how they’ve royally screwed up European automakers and the steps Lexus is taking to get around them. We’ve also told you how building cars in America isn’t the tariff fix you might think it is. Everything’s a mess, friends!
