Good morning! It’s Monday, February 3, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Canada And Mexico Tariffs To Raise Car Prices
Donald Trump finally got his way this week and goods imported from Canada, Mexico and China are now subject to higher tariffs. The move imposes a 25 percent levy on imports from Canada and Mexico, and 10 percent tariffs on goods from China. Trump is billing the move as a means of clamping down on crime and immigration from the three nations, but while that remains to be seen there’s one certainty from the tariffs: things are about to get more expensive.
For the auto industry, that’s a big deal as consumers are already stretched thin with higher new new car prices that could be set to increase by as much as $3,000 as a result of the tariffs, reports Bloomberg:
The duties would immediately hit almost one quarter of the 16 million vehicles that are sold in the US each year, as well as the parts and components that go into them — an import market that totaled $225 billion in 2024, according to research from automotive consultant AlixPartners. Tariffs will add $60 billion in costs to the industry, the research shows, much of which is likely to be passed on to consumers.
Automakers in Mexico have been preparing by preemptively importing both more components and vehicles, which may ease the blow in the first few weeks, said Guillermo Rosales, president of the Mexican Association of Automotive Distributors, or AMDA. After that, the outlook is less certain. “Everything depends on the course that the Trump administration takes in this matter,” he said.
The order “weakens the most integrated industry in North America,” Mexico’s auto associations said in a joint statement Sunday, putting “the competitiveness of North America as a whole at stake.”
Insiders are also warning that the impending trade war could mean much more than higher prices for the end consumers. North of the border, experts warn that “thousands of jobs could be lost” and there are even fears that the auto industry could “shut down within a week,” according to the president of Canada’s Automotive Parts Manufacturers’ Association.
Trump himself has now admitted that Americans may be set for a whole heap of “pain” as a result of the tariffs, reports Reuters. The measures could mean “short term” issues for America as a result of global market responses and a rise in inflation in the U.S.:
Critics say the Republican president’s plan to impose 25% tariffs on Canada and Mexico and 10% tariffs on China will slow global growth and drive prices higher for Americans.
Trump says they are needed to curb immigration and narcotics trafficking and spur domestic industries.
“We may have short term some little pain, and people understand that. But long term, the United States has been ripped off by virtually every country in the world,” he said.
The true impact of the tariffs on American shoppers will become clear in the coming weeks and months, as automakers have no doubt built up inventory in preparation for the new costs. To find out if any good will come of the additional fees, we may be left waiting even longer.
2nd Gear: Honda Invests $1 Billion In Ohio Assembly
It’s not all doom and gloom for the North American auto industry this week though, as Honda has just announced a billion dollar investment in its sites in the U.S. The enormous funding boost will see Honda’s facilities in Ohio become the central hub for the automakers electric ambitions in America.
Honda has invested $1 billion into its vehicle assembly plant in Marysville, Ohio, in order to transform the plant into a new EV hub for the brand, reports the Detroit Free Press. The investment is in preparation for the rollout of Honda’s latest electric model, the battery-powered Acura RSX that will go into production later this year:
The centerpiece is Honda’s 40-year-old vehicle assembly plant in Marysville, Ohio.
Production of its first EV, the sporty Acura RSX, begins later this year, but the factory has already torn out one decades-old production line to create a new process that will allow EVs, hybrids, plug-in hybrids, and gasoline, or internal combustion (ICE), engines to be built on a single assembly line of unrivaled flexibility.
Called the company’s EV hub, the Ohio complex is creating a template Honda will use as it begins EV production at other facilities all over the world.
Honda’s total North American EV investment — in conjunction with partners including battery maker LG Chem and mining and refining companies — will exceed $16 billion.
The Ohio plant will also be key to production of the new eclectic Honda Sedan and SUV concepts that were unveiled at CES earlier this year. Both of the new Honda EVs should enter production in 2026.
The investment isn’t about going all-in on all-electric power, however, and Honda aims to maintain hybrid production and even gas-powered car production at the same facility for years to come. This will allow Honda to maintain its cash flow during the current “unpredictable transition” to electric power that the U.S. is currently going through, adds the Free Press.
3rd Gear: Transport Emissions Will Peak This Year
There are no two ways about it, we need to dramatically cut global emissions rapidly and now it appears as though increasing electric vehicle adoption may be helping us do just that. Emissions from transport are now projected to peak this year, before the impact of increased EV ownership begins reducing transport emissions over the coming decades.
Global emissions from road transportation could peak at nine gigatonnes this year, reports Forbes. Once this peak is reached, it could begin dropping as a result of the increased number of EVs out on the world’s roads:
New research from the International Council on Clean Transportation estimates global emissions from road transportation and liquid fuel consumption may peak at around 9 gigatonnes as soon as 2025 and then begin falling, plummeting to 7.1 Gt in 2050. This peak and subsequent decline is happening roughly 25 years earlier than the ICCT’s previous forecast, thanks to ambitious decarbonization policies being adopted around the globe.
EVs are driving this remarkable turnaround, with policies adopted in six major markets since 2021 supercharging sales. In fact, transportation emissions reductions in just three of the largest-emitting markets – the United States, European Union, and China – are now projected to offset emissions growth in other countries.
The ICCT notes accelerated EV deployment, thanks primarily to government policies adopted since 2021, will cumulatively avoid 23 billion tonnes of emissions through 2050. If governments achieve their transportation decarbonization targets, cumulative emissions will fall an additional 13 billion tonnes by 2050.
Other models predict that EVs could slash emissions by an even greater amount in the coming years. So far, though, reductions in transport emissions still aren’t where they need to be if we want to hit the Paris Agreement’s target of limiting warming to well below 2°C (I don’t know what the Fahrenheit equivalent would be, maybe 17 or something?)
In order to hit that milestone, transport emissions will need to drop to 2.3 Gt by 2050, adds Forbes.
4th Gear: Hyundai, Kia Set January Sales Record
While everyone worries about the state of the North American auto industry, Korean car makers are just slowly racking up the sales. Now, Genesis, Kia and Hyundai have kicked off the new year with record sales boosted by increases here in America.
The three Korean automakers posted double-digit growth in the U.S. for the first month of 2025, reports Automotive News. The three companies outpaced the rest of the auto industry, with global sales predicted to rise between 4.4 percent to 7.4 percent in January:
Kia said sales rose 12 percent to 57,007 last month over January 2024, while Hyundai reported 54,503 sales, up 15 percent.
It was the fourth consecutive monthly increase for both brands, which are coming off a record 2024.
Randy Parker, CEO of Hyundai Motor North America, described January demand for the company’s electrified and gasoline-powered models as “incredible,” last month, with hybrid electric vehicles surging 74 percent and EV deliveries rising 15 percent.
Kia said its retail sales rose 10 percent last month to a record. Two utility vehicles ― the Telluride, up 16 percent, and Sportage, the brand’s top seller in 2024 and up 14 percent last month ― also set January records, the company said Feb. 1.
Sales at Genesis were up 14 percent during the first month of the year to hit 4,852 units. The increase was reportedly bolstered by record utility vehicle sales, adds Automotive News.
