Timeline of OEM tariff strategy
Actions taken by OEMs to curb effects of tariffs
Since January, OEMs have been making strategic decisions to reshape their supply chains to mitigate against the effects of US president Donald Trump’s tariffs and trade shifts.
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Ever since he was sworn into office in January, Trump has implemented tariffs that have dramatically changed the automotive logistics landscape, altering trade flows and manufacturing bases in the automotive supply chain, as carmakers look to lessen the blow of the steep duties on imports of vehicles and parts.
Through shifting shipment strategy, inventory management, investment and production planning and cost management, carmakers are attempting to tackle the tariff charges by being lean and resilient.
November
Toyota
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Toyota announced its plans to invest a further $10 billion in its operations in the US over the next five years as it opened a new battery plant in Liberty, North Carolina. This plant is Toyota’s 11th in the US, and the its first and only battery plant outside of Japan. According to Toyota, the nearly $14 billion facility will create up to 5,100 new American jobs.
The batteries manufactured at TBMNC will power existing Toyota models such as the Camry HEV, Corolla Cross HEV, RAV4 HEV, as well as a “yet-to-be-announced all-electric 3-row BEV” which Toyota has said will be the first of its kind to be built in the US by Toyota.
The move was praised by US secretary of transport Sean Duffy, who described it as "the latest show of confidence in this administration’s efforts to reshore manufacturing, generate new, great paying jobs, and inject billions of dollars into the economy."
October
VW Group
In October, VW Group reported a 33% decline in operating result for H1 2025 when compared with H1 2024, claiming this was primarily due to high costs from increased US import tariffs. It calculated the impact of these tariffs at €1.3 billion ($1.5 billion).
Kia
When it announced its Q3 2025 financial results on October 31, Kia reported a 49.2% year-on-year decline in operating profit. For the year's third quarter, Kia's operating profit stood at ₩1.46trn ($998.7m). It noted that this was impacted by increased incentives and the full effect of US tariffs.
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Stellantis
In early October, reports claimed that Stellantis was set to invest $10 billion in US manufacturing. Stellantis later confirmed that it will in fact invest a total of $13 billion over the next four years to “grow its business in the critical United States market and to increase its domestic manufacturing footprint”.
Part of this plan involves reopening its Belvidere Assembly Plant in Illinois to expand production of the Jeep Cherokee and Jeep Compass for the US market. This has led to concern in Canada, as the Jeep Compass is currently manufactured at its Brampton factory in Ontario.
In a letter to Stellantis’ CEO Antonio Filosa, Canada’s minister of innovation, science and industry Mélanie Joly expressed “extreme concern with Stellantis’ investment plans in Canada”, calling for the company to “respect its obligations flowing from billions of dollars of financial support extended to [Stellantis] over decades.”
August
Toyota
In early August, Toyota warned the tariff situation and related cost pressures could hit its earnings materially, forecasting a ¥1.4trn ($9.2bn) impact and lowering profit guidance for the next financial year as a result of tariffs, higher materials costs and currency moves.
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July
Nissan
Nissan suspended production of three models for the Canadian market at two US plants in July while trade talks continue between Canada and the US, according to Nikkei Asia.
The carmaker is also thought to be exploring a collaboration with Honda, looking at joint production and shared platforms to potentially build Honda trucks at Nissan’s Mississippi plant. While still unconfirmed, the OEMs have a long history of strategic partnerships, and a move like this could help both carmakers mitigate potentially steep tariffs on Japan.
Volvo Cars
In July, Volvo Cars stated that some of its models, including the ES90, “can not be sold profitably in the US” due to tariffs. While scaling back on some of its models to mitigate the financial hit, the carmaker decided to increase the utilisation of its US plant in Charleston.
In its second quarter results, Håken Samuelsson, president and CEO of Volvo Cars, said: “To increase the utilisation of our Charleston plant and to reduce the effects of import tariffs, we will introduce local production of the best-selling XC60 SUV in the USA.”
Samuelsson added that the OEM is starting to make its EX30 model in its Ghent factory in Belgium to reduce the impact of the US tariffs.
Ford, Stellantis and GM
Following the implementation of tariffs on goods imported from Canada and Mexico, North America’s ‘Big Three’ OEMs spoke with the president to ask for exemptions for carmakers.
The talks were partially successful, with Trump granting a one-month exemption for carmakers that comply with the terms of the USMCA. The move was welcomed by the American Automotive Policy Council, a trade group representing Ford, Stellantis and GM. Its president Matt Blunt said: “We look forward to working with president Trump and his administration on our shared goals of increasing US automotive production and expanding exports to markets all around the world.”
Mitsubishi
After it was announced that the US would reduce its tariff on car imports from Japan to 15% from 27.5%, a Mitsubishi executive said in a July earnings call that it "hoped that this will mitigate future impacts" but claimed that the automobile tariffs that went into effect in April had already impacted its sales activities in the US market.
Kia
In late July, Kia said it would seek to grow its US market share as some rivals scaled back US offerings due to tariffs. The company said it had not yet made detailed plans to raise prices and would instead focus on growing its US business.
June
GM
In late June, GM unveiled plans to invest $4 billion in its US manufacturing network over the next two years, shifting assembly away from Mexico and Canada in favour of localisation in the US. The strategy signalled a decisive reordering of GM’s production footprint, reshoring critical vehicle and powertrain assembly to the United States while doubling down on both electric and combustion-driven models.
The investment will expand finished vehicle production across GM plants in Michigan, Kansas and Tennessee. At its Orion Township site in Michigan, GM will introduce production of full-size petrol-powered SUVs and light-duty pickup trucks by early 2027. This represents a significant shift in the carmaker’s strategy, likely replacing units currently manufactured in Mexico and Canada, though this is yet to be confirmed.
May
GM
Once 25% tariffs on vehicle imports, and 25% on car part imports, were implemented, GM announced it would commit to invest $4bn to US vehicle production. In May, the OEM announced that the investment would expand vehicle production in Michigan, Kansas, and Tennessee. It followed its previous investment of $888m for its Tonawanda Propulsion plant in Buffalo, New York.
GM’s CEO Mary Barra said: “We believe the future of transportation will be driven by American innovation and manufacturing expertise.” She added that the investment demonstrates the OEM’s “ongoing commitment to build vehicles in the US and to support American jobs”.
The carmaker’s North American footprint is extensive, spanning 50 US manufacturing plants and parts sites across 19 states.
GM didn’t disclose whether the shift would directly impact existing volumes in Mexico and Canada, but the investment signalled a strong lean towards US localisation in its supply chain.
Honda
In May, Honda announced that it would shift some of its production of its CR-V model from Canada to the US, to minimise the impact of the tariffs. While it would keep building the models in Canada, it would up the volume at its plants in Indiana and Ohio.
At the same time, Honda announced that it would postpone its plans to build new EV factories in Ontario, Canada. In 2024, the carmaker had said it would invest almost $11bn into its North American EV supply chain, including a new EV battery plant in Alliston, Ontario and another factory that was yet to be announced.Honda said the Canadian investment would be postponed for two years due to a slowdown in EV demand. In the meantime, it said it will be “keeping a close eye on further market demands”.
Toyota
Also in May, Toyota announced its plans to move some production of its GR Corolla model to the UK, taking advantage of the UK and US trade deal which reduces tariffs on vehicle imports to the US from 25% to 10%.
The OEM’s Burnaston plant in the UK already produces a Corolla model, allowing Toyota to scale up production easily for the GR.
Rivian
In the same month, Rivian announced a $120m investment into a supplier park in Illinois, US, to help localise its supply chain.
The 1.2 m sq.ft park would boost EV supplier localisation in the area, and according to the state’s governor, would “strengthen the EV manufacturing supply chain” in Illinois and give it the “competitive edge to thrive in the clean energy economy”.
Rivian’s founder and CEO RJ Scaringe said the park will be “a key enabler to increasing production” at its plant in Normal, Illinois for its upcoming R2 model in 2026.
Tesla
In a letter to the US Trade Representative, Tesla warned US trade officials that aggressive trade measures risked harming American EV companies by provoking retaliatory measures and destabilising supply chains, urging a phased approach so manufacturers could adapt.
BMW
In a call with analysts in July, BMW executives said that, based on its contact with US officials, it expected US car tariffs to decline from July. But it noted that US tariffs would have a "notable" impact on its financial results for H2 2025.
Mazda
In a May earnings call, Mazda reported that "the impact of US tariffs in April alone was about ¥9-10bn ($58-65bn). While it was unable at the time to provide details about price increases, it noted that – in the segments it Mazda competes in – transaction prices increased in April and May, indicating a decrease in sales incentives.
Subaru
Also in May, Subaru of America confirmed in a statement that it had adjusted its pricing "in response to current market conditions". It explained that changes were made to offset increased costs while maintaining a solid value proposition for the customer.
April
JLR
JLR was among the first to pause exports once the tariff on vehicle imports to the US came into effect in April.
The carmaker, which has no manufacturing presence in the US and most of its plants based in the UK, said it had sufficient stock in the US to enable a pause in shipments, which ended up lasting one month. In a statement, the OEM said the pause would allow it to develop its mid-to-longer-term plans.
VW Group
Closely following the actions taken by JLR, VW Group decided to suspend shipments from Mexico to the US in early April. The German carmaker also held all vehicles delivered after the tariff implementation deadline at US ports of entry.
Its Audi division also said it would halt vehicle exports to the US from Europe and Mexico.
In a statement to Automotive Logistics, VW Group said it was assessing the potential impact of the duties on its supply chains and production networks, and highlighted its recent investment of $14bn in the US to support jobs and growth.
Mitsubishi
In April, Mitsubishi temporarily paused vehicle exports to US dealerships, holding vehicles at ports while awaiting clarity on the duties. The OEM said at the time that it had sufficient inventory at dealerships to meet consumer demand while halting further imports to the US.
Hyundai
In April, Hyundai Motor announced that it was launching a tariff task force to minimise the financial impacts of the tariffs, as well as develop plans to increase local sourcing of car parts in the US.
The OEM is vulnerable to tariffs as about one-third of its global sales are generated from the US market, according to Korea Investment & Securities.
March
Hyundai
Hyundai Motor took a similar approach to Toyota in March, committing $21bn to US vehicle manufacturing, supply chain and logistics until 2028, to “ensure robust supply chains”.
Hyundai said it would invest $9bn by 2028 and boost US production capacity to 1.2m vehicles, and said the total investment would also include a $5.8bn Hyundai Steel plant in Louisiana, which could supply steel to plants in Alabama and Georgia, helping avoid steep tariffs of up to 50% on steel imports to the country.
The South-Korean OEM also shifted production of some of its Tucson SUV models from its Nuevo Leon plant in Mexico to its Alabama plant in the US.
Mercedes-Benz
In March, Reuters reported that Mercedes was stockpiling inventory in the US while it evaluated the best strategies to deal with the tariffs. The OEM planned to build stock at wholesale and dealership level in anticipation of the added duties.
Audi and BMW
In March, Audi and BMW called for tariff-free trade in North America, in the lead-up to Trump’s tariffs of 25% on vehicle imports, and 27.5% for those that do not meet USMCA requirements.
Neither OEM complies with USMCA rules. As a result, an Audi spokesperson said it was considering the extent to which it would have to pass on some of the cost to its customers. Similarly, a BMW spokesperson said that tariffs “hinder free trade, slow down innovation, and set a negative spiral in motion,” adding that “they are detrimental to customers, making products more expensive and less innovative”.
Stellantis expects loss of €2.3bn due to tariffs and restructuring
Stellantis is expecting to take a hit of €2.3 billion ($2.7bn) in the first half of this year, due to costs associated with restructuring and expenses incurred from US tariffs.
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Toyota is considering moving production of the GR Corolla from Japan to the UK
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GM commits $4bn to US, moves assembly from Mexico and Canada
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JLR restarts vehicle shipments to the US following a pause due Trump tariffs on car and parts imports
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VW Group one of a number of carmakers revising exports of vehicles from Mexico to US
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Exemptions will apply to carmakers in line with USMCA, following talks with GM, Ford, Stellantis
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Audi and BMW call for tariff-free trade in North America as Trump tariffs take their toll
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Ford’s president, CEO and director James Farley warns of serious financial impact on auto sector if Trump tariffs persist
February
Toyota
Shortly after the inauguration, Toyota announced that it will make its own EV batteries at its plant in North Carolina and begin local supply in April, showing its commitment to EV battery production in the US. The $14bn plant in Liberty, Toyota Battery Manufacturing North Carolina (TBMNC), is the OEM’s first in-house battery plant outside of Japan. The carmaker said the first shipment of battery packs would go to Toyota Kentucky, adding through a spokesperson that the company supports trade policies that allow it to build where it sells, and buy where it builds. The move could help Toyota to avoid tariffs incurred from importing batteries into the US for its plants in America.
January
Ford
In the lead up to the implementation of the tariffs at the start of the year, many carmakers including Ford warned of the “huge impact” on the automotive industry if tariffs were prolonged, particularly those on Canada and Mexico. When Trump reaffirmed his plans for tariffs, OEMs began strategising.
We will update this story as more information becomes available...
