US Car Buyers Throng Dealerships As Trump's Tariff Threat Looms Over Prices

In the lead-up to ‘Liberation Day’, car dealerships in the US are seeing a spike in footfalls, as consumers race to book their new vehicles to avoid the post-tariff sticker shock that, according to some estimates, could reach as high as $10,000 to $15,000 even for mid-range cars.

What Happened: The looming 25% tariffs on all car imports to the US is set to become a reality within a few short hours, and it’s not just on the cars that are imported, but also those that are made in the US, but use imported parts. Since there is no such thing as an ‘All-American Car,’ pretty much every make and model will see prices spike in the coming days.

See More: Trump’s 25% Tariff On Imported Vehicles Could Shatter Detroit’s Auto Economy, Warns Business Leaders: ‘It Will Hurt Hardworking Americans’

Erin Keating, an analyst at Cox Automotive, said in a note that after this spike, which will last several days, auto sales will crater for the next several months. Both used and new car prices will increase, and certain models will be eliminated from American markets.

Keating further adds, “We have seen this movie before. During COVID, supply became constrained, costs skyrocketed. While the increase in prices this time may be for completely different reasons, it still stands to reason that the market will not bear another significant increase,” highlighting the risks these tariffs pose to the auto industry.

Why It Matters: As a result, car makers and dealerships are expected to have a good first quarter, but that’s not necessarily the case for Tesla Inc. (NASDAQ:TSLA), which is set to report its deliveries during the quarter on Wednesday.

Analysts expect the company to report its worst quarterly growth in years with just under 410,000 deliveries, up by a mere 5% from the prior year. This was expected as the brand took a nosedive across several key markets in recent months, in response to Elon Musk’s increasing political involvement.

Tariffs are set to hurt Tesla especially hard since analysts estimate that they would add as much as $12,000 to the prices of most current EV models.

As you can expect, Tesla isn’t doing too well with all these issues, and according to Benzinga’s Edge Rankings, the stock is unfavorable in short, medium, and long-term. To see how the EV giant compares with its peers and competitors, check out Benzinga Edge Pro.

Read More:

• Japanese Automakers Face $29 Billion Tariff Hit, Nissan, Mazda, Subaru Most At Risk, Says Analyst

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