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More tariff impacts
Stellantis Expects $2.7 Billion First Half Loss As Restructuring Costs, US Tariffs Bite
Stellantis reported a preliminary 2.3 billion euro ($2.7 billion) first-half loss as it faces the dual challenge of revamping its product ranges in Europe and the United States while also dealing with the impact of U.S. tariffs on vehicles and auto parts.
Source: Reuters
Tariffs, Changing EV Demand Add Volatility To Automotive Product Planning
Trying to predict what consumers will want to drive five or more years into the future is a daunting gamble even in the calmest of times. Now, the stakes have been raised as automotive product planners place multibillion-dollar bets in a market roiled by widespread economic and regulatory uncertainty.
Source: Automotive News
GM Net Income Falls 35% As Tariffs Cost $1.1 Billion In Q2
General Motors' second-quarter net income dropped 35 percent to $1.9 billion, with import tariffs costing the automaker $1.1 billion since President Donald Trump began imposing them in April. GM said its global revenue declined 1.8 percent to $47.1 billion in the quarter ended June 30. Adjusted earnings before interest and taxes fell 32 percent to $3.04 billion.
Source: Automotive News
Trump Says Japan Trade Deal Sets Tariff Rate at 15%; Detroit 3 Raises Concerns
A group representing General Motors, Ford Motor Co. and Chrysler parent Stellantis raised concerns about a trade deal that could cut tariffs on auto imports from Japan to 15% while leaving tariffs on imports from Canada and Mexico at 25%. President Donald Trump has threatened to hike tariffs on Mexico to 30% and Canada to 35% Aug. 1. White House spokesman Kush Desai defended the deal, calling it "a historic win for American automakers by putting an end to Japan's unfair auto trade barriers for American-made cars."
Source: Automotive News
Hyundai Motor Flags Larger Tariff Impact After Profit Drops
South Korea's largest carmaker reported weaker earnings in the second quarter, weighed by increased marketing costs and the impact of U.S. tariffs that it said could be more significant in the coming quarters.
Source: The Wall Street Journal
Steel, Aluminum, Copper Prices Rise As Tariff Costs Pile Up For Auto Industry
Domestic producers of steel and aluminum have raised their prices since President Donald Trump's metal tariffs went into effect earlier this year, leading to higher costs for automakers and suppliers also grappling with tariffs on vehicles and parts. Steel Dynamics on July 21 said it sold steel in the second quarter for an average price of $1,134 per ton, 14 percent higher than in the first quarter.
Source: Automotive News
Volkswagen Cuts Guidance After Taking $1.5 Billion Hit From U.S. Tariffs In First Half
Germany's Volkswagen on Friday lowered its full-year guidance and reported a sharp drop in second-quarter profit, as the auto giant navigates the disruptive impact of U.S. tariffs and restructuring costs. Europe's biggest carmaker posted operating profit of 3.83 billion euros ($4.49 billion) for the three months through June, down 29% from 5.4 billion euros a year ago.
Source: CNBC
Feds to reimburse dealerships for unpaid EV rebates
The Canadian government has announced it will reimburse car
dealerships that covered the cost of electric vehicle (EV) rebates
for customers after the sudden suspension of the Incentives for
Zero-Emission Vehicles (iZEV) program in January 2025. The iZEV
program offered customers up to $5,000 off the purchase of a new
zero-emission vehicle. But its abrupt suspension earlier this year,
after nearly $3 billion in funding was exhausted, caught the
industry off guard.
Although the government had issued a brief warning that funds were
running low, many dealerships continued to process purchases under
the assumption that reimbursement would still be available.
According to the Canadian Automobile Dealers Association, dealers
collectively advanced an estimated $11 million in rebates to
customers that they were later unable to recover once the program
was shut down.
Reimbursement process
Transport Canada has temporarily opened access to a ZEV claims
portal, allowing dealerships, automakers and authorized sellers to
submit outstanding claims. Eligible claims must meet all the
original program's criteria and apply to vehicles delivered
between April 1, 2024, and January 12, 2025. Additionally, the
rebate must already have been provided to the customer.
Each enrolled participant may file up to 25 claims per day through
the portal.
The ZEV portal will remain open until August 11.
EV sales slump
The sudden withdrawal of federal EV incentives had an immediate
impact on the market.
EV sales, which had reached a record 18.29 per cent of all new
vehicle sales in Q4 2024, dropped sharply to 8.7 per cent in Q1
2025, according to the latest Statistics Canada data.
Industry groups have warned that the loss of federal incentives
risks stalling Canada's transition to zero-emission
transportation, particularly at a time when affordability remains a
major barrier to adoption. While the federal government has said
that it is working on reinstating a federal zero-emission vehicle
rebate, no firm details or timelines have been announced yet.
Source: Electric Autonomy Canada
EV owners waiting longer for completed repairs, need multiple visits
The sale of new electric vehicles in the second quarter of 2025 grew by nearly 5 percent compared with the previous quarter, and the purchase of new EVs in the first half of the year set a record at just over 607,000 vehicles, according to Cox Automotive's Kelley Blue Book team.
Source: Automotive News
Ford opens $3 billion line of credit amid uncertain market
At the moment, it's unclear what automakers will be dealing
with in terms of potential tariffs being imposed on goods and
vehicles from a variety of countries, as the Trump administration
is still in the process of hammering out new trade deals with many
of them. As such, Ford opted to suspend its full-year guidance back
in May, at least, until this picture becomes a bit clearer. Now,
Ford is using a familiar financial tactic to boost its liquidity,
too.
According to CBT News, Ford has secured a $3 billion term loan
credit agreement that's being administered by JP Morgan Chase,
but is otherwise pided between multiple lenders. The automaker
stated that it made this move proactively as it works to give
itself some financial flexibility and increase liquidity, which is
key during these times of economic uncertainties. It would also
help The Blue Oval better navigate a potential downturn in regard
to demand for its products, which could happen if tariffs result in
price increases over the coming months.
Such a move is nothing new, of course, as we just saw Ford take out
an additional $4 billion dollar line of credit back in August 2023.
At the time – when Ford was dealing with uncertain demand for
EVs and negotiations pertaining to a new UAW contract – it
noted that this gave the company "additional working capital
flexibility on top of our already strong liquidity position to
manage through a variety of uncertainties in the present
environment. Especially over the last several years, we've been
deliberate in maintaining a strong cash and total liquidity
position so we can run the business as it is today and invest in
the business that we envision."
In the meantime, Ford is taking broad measures to reduce the impact
of tariffs, including stocking up on parts that comply with the
current U.S.-Mexico-Canada Agreement and renegotiating contracts
with suppliers. Regardless, the automaker expects tariffs to result
in "marginal" price increases in the second half of
2025.
Source: Ford Authority
Ram TRX is coming back, says stellantis CEO
Volvo Car AB is taking an impairment charge of $1.2 billion due
to delays to some of its electric models and the escalating cost of
tariffs. Past development setbacks and duties in the United States
have hit Volvo's battery-powered models, the EX90 sport utility
vehicle and ES90 sedan. The effect of the one-time non-cash charge
on net income will be $936 million in the second quarter, the
carmaker said Monday. Its shares declined 4.4% at the close in
Stockholm, the steepest drop since April. The stock is down around
a quarter this year. "Due to import tariffs the company is
currently unable to sell the Volvo ES90 profitably in the United
States, while ES90 margins are also under pressure in Europe for
the same reason," the company said in a statement.
Source: Bloomberg via The Detroit News
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