Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Apr 21 2025 | VIEW ONLINE

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Automotive

The U.S. auto market might be in for a world of hurt due to President Donald Trump’s tariffs, according to a new report from S&P Global. S&P Global Mobility is cutting 700,000 car and light truck sales from its 2025 forecast, the auto industry tracker revealed in a report published Monday. “The impact of Trump’s auto tariffs, in combination with the 10% universal tariff, has led to one of the largest single-month changes we’ve ever made to the forecast,” the group wrote. “Only changes reactive to the 2020 Covid global manufacturing pause and the 2008-09 global financial crisis were larger than the changes to the sales and production forecasts for April 2025.” S&P also cut its 2026 forecast by 1.2 million units and its 2027 forecast by 930,000 units compared with its outlook a month ago. | Quartz

One major auto-industry tracker thinks President Donald Trump’s vision of purely U.S.-made cars is purely fantasy. A group of Wedbush analysts led by Daniel Ives sent a note Tuesday saying that the president’s “head-scratching tariff slate” could result in a 15-20% reduction in demand for new auto purchases in the U.S. in 2025. “We reiterate the concept of a U.S.-made car with all U.S. parts is a fairy tale fictional narrative,” the analysts wrote. “This auto tariff (in its current form) will send the auto industry into upside-down mode and raise the average price of cars between $5k on the low end and $10k to $15k on the high end.” The analysts pointed out that manufacturers that make their vehicles in the U.S. import a large portion of their parts from abroad and therefore won’t be able to avoid the tariffs. | QuartzNetting all of the dynamic implications of auto tariffs, Thomas King from J.D. Power forecasts that for 2025, new vehicle prices will increase 5% while new vehicle sales will be down 8%.

The impact of Trump’s auto tariffs, in combination with the 10% universal tariff, has led to one of the largest single-month forecast changes that S&P Global Mobility has ever made. Only changes reactive to the 2020 Covid global manufacturing pause and the 2008-09 global financial crisis were larger than the changes to the sales and production forecasts for April 2025. Based on the activity in the past three months and the trajectory of the latest actions across the globe, the impact of the tariffs has potential to have a massive near-term impact on global sales and production, with the U.S. and North America feeling the worst of the impact. | S&P GlobalThomas King from J.D. Power illustrates how automotive tariffs will disproportionately penalize (or reward) certain OEMs and even models within a segment.

The number of vehicles available for purchase in the U.S. is decreasing quickly as people scramble to buy cars before the full effects of President Donald Trump’s tariffs kick in. The total supply of new vehicles on dealer lots is down 10.2% from the start of March, from 2.99 million to 2.69 million, according to Cox Automotive Inc. The group says sales surged last month due to seasonal trends as well as “the urgency created by the import tariff announcement.” By the end of March, the 30-day weekly sales pace was up 17.2% compared with late February and up 11.9% year-over-year. U.S. lots currently have a 70-day supply of new vehicles, down 21 days from the 91 days calculated at the beginning of March. That places the early April supply down 10 days compared with the same period last year and at its lowest level since 2023. | Quartz

American drivers were already being squeezed before the tariffs landed. The average sticker price of a new passenger vehicle in the U.S. was around $47,500 as of March, a 22% increase from five years earlier, according to Kelley Blue Book. As car prices have risen and high interest rates have made for expensive financing, delinquencies on auto loans were hovering near their highest level in more than 30 years in March. And now import taxes have been added to the mix, threatening to drive vehicle prices up even further. Automakers and parts manufacturers can absorb some of the added costs, and a few companies such as Hyundai have pledged to temporarily freeze prices. But in most instances, at least some of the extra expenses will be passed on to consumers. The impact could be particularly pronounced at the cheaper end of the market, as many of the least expensive models are built outside the US to maximize already-low profit margins. | Bloomberg ($)

Tier 1 auto suppliers are refusing to take new orders from automakers unless their get their U.S. tariffs costs paid up front. French suppliers Novares Group and Valeo, both with factories in Mexico providing parts to automakers in the U.S., say their customers must pay the full amount of any tariffs slapped on the parts they are contracted to make. With current tariffs on all automotive imports running at 25%, that’s an immediate hit to the automakers’ bottom line that suppliers are refusing to mitigate. Suppliers say they are already under pressure from the increasing switch to less complex battery-electric vehicle powertrains with fewer parts required and are in no position to absorb any tariff charges. | Wards Auto

Glenn Mercer illustrates how eerily stable U.S. franchise dealer profit margins (pre-tax return on sales) have been over the past 50 years.

Dealer F&I operations hit a new milestone in March 2025, according to StoneEagleDATA. Total F&I income per dealer reached an all-time high of $242,283, topping even the early 2021 post-COVID boom — despite fewer deals per rooftop. Average deal counts rose more than 29% year-to-date through March, and although March’s average of 129 deals per dealer didn’t match 2021’s peak of 148, F&I income still hit a new record. That’s a 115% increase compared to 2019. | Stone Eagle

Consumers have been racing to snatch up cars in recent weeks before President Donald Trump’s auto tariffs trigger widely expected price hikes. But even drivers who aren’t buying vehicles can expect to pay more for repairs and insurance. The cost of auto insurance has been rising for several years, and experts say prices were already likely to increase in 2025. An extended trade war could cause the average annual cost of car insurance to rise more than $300 by the end of the year, according to estimates from the insurance agency Insurify. The reason is straightforward: It will cost insurance companies more to replace damaged car parts that are subject to tariffs. | NBC News

Tesla insurance premiums are increasing at more than twice the rate of the rest of the U.S. auto market due to higher repair costs and amid increased instances of vandalism on Tesla vehicles. Insurance on Tesla vehicles has always been fairly high, so much so that it encouraged Tesla to launch its own insurance product to try to mitigate the issue. A study from Insurify indicates that insurance premiums on Tesla vehicles have increased at about twice the rate of the rest of the market, and the Model Y premiums increased by almost 3 times the rest of the market increase. | ElectrekCarbon fiber is one of the best ways for automotive manufacturers to reduce vehicle weight, thanks to its blend of strength and lightness — but regulators from the European Union have doubts as to whether health concerns surrounding the material outweigh the benefits. At least, that's what a new amendment to the collective End of Life Vehicles (ELV) Directive suggests, according to reporting by Japanese newspaper Nikkei. As first brought to broader attention by Carscoops.com, the regulatory body within the European Union is debating whether to add carbon fiber to its list of harmful materials in vehicles. and if it does, the potential impact of such an addition could be widespread, as it would make it very difficult for automakers to use it in future vehicles. Essentially, the ELV directive focuses on eliminating potential health risks during the dismantling and recycling of vehicles, and currently includes lead, mercury, cadmium, and hexavalent chromium. Naturally, the process of taking apart a car opens up all kinds of exposure possibilities to toxic fumes, liquids, and so forth, but the EU says carbon fiber poses a unique risk in that it can embed into your body's tissues. | Road & Track

In Formula 1, there are several critical junctures during a Grand Prix that influence its outcome. One of those is what happens during pit stops, which, if done correctly, are a balletic display of engineering. Red Bull was the fastest and most consistent pit-stop crew last season, with it and McLaren Racing having the fastest individual pit time of 1.9 seconds. McLaren holds the record in Formula 1, at 1.8 seconds in the 2023 Qatar Grand Prix. | The New York Times ($)

⚡️ EVs

Mary Barra’s great hope was to electrify General Motors. After an entire career at the automaker—from inspecting fenders and hoods at the age of 18 to spending the last 11 years as chief executive officer—Barra has staked her legacy on EVs. Her bet has gotten riskier over the past year, first due to a slowdown in EV sales and then the return of Donald Trump and his tariff regime. Those factors encouraged other carmakers to hedge their bets on EVs by shifting more production back to gas cars or to hybrids. Barra has mostly stayed the course. She’s hired Tesla veterans to make GM’s battery capabilities more competitive with those of Elon Musk’s company and surging upstarts from China, and she’s taken steps to slash costs, working toward what the company calls its “low-cost EV architecture.” The more immediate challenge is figuring out how to sell an electric car in Trump’s America. The president has vowed to wipe away major elements of Joe Biden’s Inflation Reduction Act (IRA), such as one that gives consumers tax credits for new or leased EVs and another that pays automakers credits for building them. GM gets at least $800 million a year from this program—subsidies that were designed to chip away at the cost advantages of gas cars. | Bloomberg ($)

Electric cars are a lot less complicated than their combustion-powered counterparts, at least when it comes to the number of moving parts and maintenance needs. There are almost no liquids to change and the brake pads can last hundreds of thousands of miles, but they often need specialized service technicians to figure out how to repair them when something goes wrong. On average, electric vehicles built between 2020 and 2022 had a breakdown rate of 4.2 out of 1,000 vehicles, whereas combustion cars were considerably higher at 10.4 per 1,000. The good news is that, irrespective of the powertrain, the breakdown rate is steadily decreasing. In 2020, EVs had 8.5 breakdowns on average, while combustion cars had 12.9. These figures went down to 4.3 for EVs in 2021 and 1.7 in 2022, while combustion-powered vehicles had an average breakdown rate of 8.2 in 2021 and 5.4 in 2022. | Inside EVs

🇨🇳 China

John Lawler, Ford Motor Company’s vice chair, says their greatest threat is China: “I don’t think we can say no, they’re not going to come to the U.S.,” he said, despite current policies blocking Chinese-made vehicles from the U.S. market. “The Chinese are coming, and they are a force to reckon with.” “With the shifts that are happening in the industry, we believe we need to be a global player. The competitive nature of where the Chinese are heading, they’re looking to dominate around the world. If we get pushed back into just operating here in the U.S., and being a U.S. automaker, large profit, but where does that put us as a company in 10, 15 years? We have to compete, and we have to compete globally against the best that are out there.” | Detroit Free Press

With Beijing eager to break foreign automakers’ dominance in the domestic Chinese market, the State Council, China’s cabinet, received a letter in 2000 from Wan Gang, a Chinese national who had worked as an Audi engineer in Germany for nine years. In his letter, detailed on the State Council’s website recognizing his contribution to electrified vehicles, Wan proposed Chinese automakers had a chance to leapfrog foreign rivals at home by developing and refining EVs and hybrids. Wan was hired in 2000 by China’s Ministry of Technology as chief scientist of a state-backed research project for electrified vehicles. In 2007, he was elevated to minister, according to the State Council. In a 2023 interview with China Central Television Station, he recalled his projection in 2000: China would need about 20 years to achieve large-scale commercialization of electrified vehicles. | Automotive News ($)

Three years ago, after the pandemic had laid bare the world’s vulnerability to supply-chain disruptions, the U.S. government designated a large swath of the periodic table of elements — 50 minerals in all — as “critical.” The United States obtains more than half of them, including a category of 17 minerals known as “rare earths,” mostly from China. And this week, China tightened its export restrictions on six rare earths, all but halting U.S. access to new supplies. China not only mines most of the world’s rare earths, it is home to most of the world’s capacity for refining them. | The New York Times ($)

On April 4, China’s Ministry of Commerce imposed export restrictions on seven rare earth elements (REEs) and magnets used in the defense, energy, and automotive sectors in response to U.S. President Donald Trump’s tariff increases on Chinese products. The new restrictions apply to 7 of 17 REEs—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—and requires companies to secure special export licenses to export the minerals and magnets. REEs are crucial for a range of defense technologies, including F-35 fighter jets, Virginia- and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition series of smart bombs. For example, the F-35 fighter jet contains over 900 pounds of REEs. An Arleigh Burke-class DDG-51 destroyer requires approximately 5,200 pounds, while a Virginia-class submarine uses around 9,200 pounds. | CSIS

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Autonomy & Robotics

Tesla's plans to ship components from China for Cybercab and Semi electric trucks in the United States were suspended after President Donald Trump raised tariffs on Chinese goods amid a trade war, said a person with direct knowledge. The move could disrupt Tesla's plan to start mass production of the much-anticipated models, which its CEO Elon Musk has been touting to investors as major innovations providing growth momentum of the U.S. automaker. Tesla was ready to absorb the additional costs when Trump imposed the 34% tariff on Chinese goods but could not do so when the tariff went beyond that, leaving shipping plans suspended, said the person, who declined to be named as the matter is private. | Reuters ($)

Public beta testing of safety-critical products sold for use by ordinary retail customers is a perversion of the idea of beta testing. The description of how public beta for Automated Vehicles (AVs) works and the arguments for its utility are seductively similar to narratives about how beta testing works for other products. But in the world of safety-critical products, public beta testing has contributed to severe injuries and even deaths. AV public beta testing has turned into a way to deploy immature, still-evolving software to retail customers to both get them to think they are getting the latest shiny technology, and also deflect blame for any software defects. “It is only a beta, so bugs are to be expected.” “Sure, that failed, but the next release will blow your mind.” | Phil Koopman

✈️ Aviation & Space

The first generation of electrified personal air transport, formally called Electric Vertical Take-Off and Landing Aircraft or eVTOLs for short, have already taken flight. They have attracted the attention and money of deep-pocketed venture capitalists, all of whom are racing to be first with a commercial version. EVTOLS are already a billion-dollar industry, and the market isn’t even proven yet. Everyone from automotive makers to defense contractors are envisioning a near-future where electrified aircraft do everything from get New Yorkers to the airport in minutes rather than hours to quietly deposit soldiers behind enemy lines. The “addressable market” could by 2040 be upwards of a $1 trillion, according to Morgan Stanley. | Bloomberg ($)

Elon Musk's SpaceX and two partners have emerged as frontrunners to win a crucial part of President Donald Trump's "Golden Dome" missile defense shield. Musk's rocket and satellite company is partnering with software maker Palantir Technologies and drone builder Anduril Industries on a bid to build key parts of Golden Dome. All three companies were founded by entrepreneurs who have been major political supporters of Trump. In his January 27 executive order, Trump cited a missile attack as "the most catastrophic threat facing the United States." | Reuters ($)

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": a 1980 BMW M1. | Broad Arrow Auctions

Have a great week,Steve Greenfield

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📺 In The News

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On this week's "Future of Automotive" segment on CBT News, we discuss how tariffs will lead to an increase in the cost of vehicle repairs and an inevitable increase in vehicle insurance premiums. | CBT News ($)

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🌟 MyMechanic connects downed trucks with trusted local mechanics, towing services, parts suppliers, and repair shops for dependable roadside assistance. | MyMechanic

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