Good morning! It’s Thursday, April 24, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.
In this morning’s edition, we are looking into news that the Trump administration may be considering easing tariffs against the auto industry as well as Tesla’s dismal March in Europe. We’re also checking out Nissan’s massive fiscal year loss and what Hyundai is doing to deal with tariffs.
All of that and more is in today’s Morning Shift.
1st Gear: U.S. may ease tariffs on auto industry
The Trump administration is mulling over the idea of reducing certain tariffs that target the auto industry. Executives have warned that these tariffs would hurt both profits and jobs, which isn’t really what you want to happen to your home-gown car manufacturers. Right now, there are two options on the table.
One would space cars and parts already subject to tariffs from being hit with additional duties like levies on steel and aluminum imports. It would eliminate a so-called “stacking” of tariffs. The other option is a big reversal of course from the administration. It would fully exempt auto parts that comply with the U.S.-Mexico-Canada trade pact. Those components don’t currently face tariffs, but the Trump admin has said in the past it planned to tax the non-U.S. share of those parts from our neighbors to the north and south. Exempting those parts would get rid of that nearly unfeasible idea. If implemented, Trump’s plan would create a logistics nightmare for North American manufacturers.
The Trump administration is also apparently considering exempting auto parts brought over from China from a 20% tariff having to do with a fentanyl dispute. From Bloomberg:
The proposals and options remain under consideration and President Donald Trump has not signed off, cautioned the people who asked not to be identified discussing the matter because it isn’t public. His tariff policies often change quickly, underscoring the fluidity of policy deliberations. But the discussions offer a signal that the administration is considering ways to narrow the scope of levies affecting the auto industry.
If adopted, the changes would be a significant reprieve for automakers who have warned of devastating consequences from the Trump tariffs, including higher vehicle prices, production cuts and potential job losses. The industry relies on deeply integrated supply chains spanning North America for the vehicles they sell in the US.
Trump has separately applied tariffs on goods from Canada and Mexico, though exempted USMCA-compliant goods. The tariffs on autos and auto parts, however, were poised to heavily disrupt the integrated continental supply chain. The US plan, as initially announced, offered something of an olive branch by tariffing only the non-US share of USMCA-traded vehicles, and delaying a potential tariff on parts traded under the pact.
On April 23, Trump was asked in the Oval Office if he was considering changes to auto tariffs, but he indicated he wasn’t. Actually, he said there was a chance that tariffs could increase. Well, things change fast in Trump’s world.
If the tariffs against the auto industry are indeed lowered, it would mean the hard work of the Big Three’s lobbyists has paid off. All three automakers have told the administration that tariffs would drive up costs, triggering profit warnings and layoffs. That’s not what you want to happen.
2nd Gear: Tesla sees 28.2% drop in Europe
Tesla’s European can sales saw a sizable 28.2% drop in March compared to the same time last year. The dismal news for the Austin, Texas-based automaker comes as the overall battery electric market in Europe rose 23.6% and overall new car sales rose 2.8% in the same month.
It’s another sign that the general public in Europe is deeply turned off by CEO Elon Musk’s alt-right antics and political medaling both in the U.S. and in Europe. It’s the third straight month Tesla sales have fallen on the continent, and it also means its total market share has declined from 2.9% to 2% in just one year. From Reuters:
March sales in the European Union, Britain and the European Free Trade Association rose to 1.42 million cars, after falling for two months, the ACEA data showed.
Registrations at Volkswagen and Renault increased by 10.3% and 13.0% respectively, while they fell by 5.9% at Stellantis.
[…]
In the EU, total car sales fell 0.2% year-on-year, declining for a third month even as registrations of battery electric (BEV), hybrid electric (HEV) and plug-in hybrid (PHEV) cars increased by 17.1%, 23.9% and 12.4% respectively.
Electrified vehicles – BEV, HEV or PHEV – sold in the bloc accounted for 59.2% of passenger car registrations in March, up from 49.1% in the previous year.
It was a bit of a mixed bag when it came to individual European countries. Spain and Italy saw increases of 23.2% and 6.3%, respectively. Britain also saw a 12.4% rise. However, France and Germany saw respective drops of 14.5% and 3.9%. Can’t win ’em all.
3rd Gear: Nissan managed to lose $5.3 billion
There are few automakers starving for a win more than Nissan is right now, and the hits just keep coming. The Japanese automaker warned that it’s about to post a net loss of as much as $5.3 billion for the fiscal year that ended in March. For those keeping score at home: that is a record annual deficit for the company. Sure, a lot of that was brought on by restructuring charges, but, at the end of the day, a loss is a loss. From Bloomberg:
With an aging lineup, Nissan has been discounting its cars in order to avoid building up inventory, eroding profits. Analysts on average were projecting a loss of ¥112 billion, which itself was worse than Nissan’s prior outlook for a deficit of ¥80 billion.
The even weaker than expected results will put increasing pressure on Nissan to find another lifeline after efforts to combine with Honda formally ended earlier this year. That led to the ouster of Chief Executive Officer Makoto Uchida, who’s said it will be “difficult to survive” without a partnership of some sort.
While Nissan slightly raised its sales forecast late Thursday, the company warned that its net loss could be ¥700 billion to ¥750 billion. “This is primarily due to changes in the competitive environment and deterioration in sales performance,” the automaker said.
It’s a storm on two fronts for Nissan. Sales are faltering in both the U.S. and China — two of its most important markets. The automaker’s aging lineup doesn’t offer any hybrids in the U.S. and it has been dealing with a massive amount of management turmoil and infighting. At the same time, it’s facing a $5.6 billion debt obligation next year. It’s not exactly a winning strategy, I’ll tell you that much.
Shares of the company are, unsurprisingly, in the toilet. Its stock has fallen 31% so far this year after suffering a 13% decline in 2024. I’m not sure exactly what it’ll take to fix Nissan, but I know it’s going to take nothing short of a herculean effort.
4th Gear: Hyundai is still very worried about tariffs
Hyundai isn’t going to wait around to see what the Trump administration has planned for automotive tariffs. Instead, the Korean automaker is launching a task force to respond to U.S. tariffs, and it’s moving production of some Tucson crossovers from Mexico to the United States. However, this will probably be small potatoes in the grand scheme of things. Hyundai only produced about 16,000 of the compact crossover in Mexico in 2024.
It’s also apparently considering whether or not to move production of some U.S.-bound vehicles from South Korea to other locations that are more favorable for getting around tariffs. Right now, Hyundai/Kia/Genesis — which combine to be the world’s third-biggest automaker by sales — is super vulnerable to Trump’s tariffs. From Reuters:
They generate about one-third of their global sales from the U.S. market and imports account for roughly two-thirds of their U.S. car sales, according to data from Korea Investment & Securities.
“We expect a challenging business outlook to continue due to intensifying trade wars and other various unpredictable macroeconomic factors,” Hyundai said in a statement.
The task force, launched this month, will seek to minimise the impact of U.S. tariffs on its finances and will craft plans to increase local sourcing of car components in the United States.
The task force comes on top of a $21 billion U.S. investment plan that Hyundai Motor Group announced in March while meeting at the White House with Trump. Part of the automaker’s plan is to boost production at its new Georgia facility, but it did warn that a ramp-up of U.S. output would take time, and tariffs could cost the group billions.
Reverse: Look at this truck!
On this date one year ago, I saw this really cool Jeep Comanche SporTruck outside a bar in Lincoln, Montana. I figured you all deserved to see it too. If I had but one wish for the auto industry, it would be for more sick graphics packages like this one.
On The Radio: The 1975 – Love It If We Made It
This song is sort of a Millennial version of Billy Joel’s “We Didn’t Start the Fire,” but, like most millennial things, it’s even more dire and depressing. Still, it’s a great song with a powerful message. I really cannot tell you how many times I’ve listened to this song since January 20.
