Intel Report: The Weekly Mobility News That Matters

BY AUTOMOTIVE VENTURES | Apr 7 2025 | VIEW ONLINE

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What We're Reading:

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Automotive

During Detroit’s heyday, in the decades after World War II, General Motors and Ford Motor Company employed more than 850,000 people in the U.S. Today, the companies combined have about 180,000 U.S. employees. President Trump’s stated aim is to reclaim the lost glory of American industry, bringing back the factories and manufacturing jobs that have fled elsewhere. “We’re going to produce the cars and ships, chips, airplanes, minerals and medicines that we need right here in America,” Trump said. But after three decades of setting up supply chains and factory networks under free-trade rules, automakers now find themselves peering into a funhouse mirror of tariff scenarios: a 25% duty on vehicle imports, higher steel and aluminum costs, a 20% tariff on anything from China and a potentially catastrophic levy on auto components that is still being hashed out. Observers inside and outside the industry believe that the tariffs could deal a heavy blow to the two storied giants of American car manufacturing. One U.S. auto-industry executive described three potential outcomes: “OK, bad and Chernobyl.” | The Wall Street Journal ($)

Douglas Irwin, the John French Professor of Economics at Dartmouth College and a senior fellow at the Peterson Institute for International Economics, warns even if some companies relocate factories back to the U.S. to avoid high tariffs, “jobs would probably not follow,” indicating that manufacturing processes might remain automated or streamlined, limiting new employment opportunities. | Wards Auto

Automakers are seeing what might be described as a Trump bump. On Tuesday, manufacturers such as GM, Hyundai and Ford reported double-digit percentage increases in U.S. sales tallies for March or the first quarter. Market researcher J.D. Power last week forecast U.S. new-vehicle retail sales would surge 13% in March. With President Trump’s automotive tariffs making headlines, many consumers are accelerating purchases to get ahead of increased costs, according to analysts and dealers. The good times may not last, if prices go up. That would likely disrupt a two-year recovery in U.S. car sales, which came after pandemic-related supply-chain problems snarled sales early this decade. | The Wall Street Journal ($)

Consumers are very much paying attention to tariffs, as demand on a seasonally adjusted annualized basis surged to 17.8 million units, highest for any month in nearly four years, and far above January-February’s combined total of 15.8 million. Buyers flocking to dealer lots to beat potential price increases, combined with some pre-tariff push by automakers raising deliveries to fleet customers lifted raw volume to over a 4-year high, not to mention a rare double-digit year-over-year gain. Regardless of any coming impacts from tariffs, March's booming results will cause lower volume in the second quarter due to the additional drain to dealer inventory that, based on industry norms, was already lean prior to the month. | Wards Auto ($)

There are no winners when it comes to President Donald Trump’s tariffs on car imports, according to Wedbush analyst Daniel Ives, who described the levies as a “back breaker and Armageddon” for the automotive industry. Following discussions with several people within the industry globally, Ives said the conclusion was that tariffs would cause “pure chaos” and increase the average price of cars between $5,000 to $15,000 in the US. “Every automaker in the world will have to raise prices in some form selling into the US,” Ives wrote in a note published on Friday. “The supply chain logistics of this tariff announcement heard around the world is hard to even put our arms around at this moment.” | Bloomberg ($)

Carmakers face a difficult decision on how to react to Trump's tariffs. Most have imported a stockpile of cars and parts, but the effects of the levies will be felt in a few weeks as these run down. As tariffs bite, carmakers will absorb some of the increased costs, but are likely also to raise prices. That could add $10,000 or more to fancier vehicles and $3,000-4,000 to average-priced cars, analysts believe. The greater dilemma concerns the long term. Should car firms unwind cross-border supply chains built up over 30 years? Even if Mr Trump keeps his promise to maintain tariffs for his full term, the next administration might reverse them as fast as they arrived. And Mr Trump may yet be amenable to deals that include some reshoring of production in return for lower duties. | The Economist ($)

President Trump’s decision to slap 25% tariffs on import vehicles starting this week has led Cox Automotive Inc. to lower its 2025 sales volumes to a range of 15.6 million to 16.3 million, vs. an earlier forecast of 16.3 million. For context, 2024 total light-vehicle sales were 16.0 million, an increase of 2.5% vs. 15.6 million in 2023. That’s total U.S. new light-vehicle sales, including retail and fleet. The updated Cox Automotive forecast for U.S. used-vehicle sales is now in a range of 37.6 million to 38.0 million. The high end of that range is an increase over the previous Cox Automotive forecast of 37.8 million, but the low end of the range is lower. | Wards Auto

As the President has said that he expects no end to the U.S. tariff on auto and auto parts imports, S&P Global Mobility is expecting persistent tariffs at a high level and few exclusions. Depending on the Administration’s actions in the next few days, this seems to be the new baseline for automotive trade. Along with increasing costs for importing vehicles, costs will increase for auto manufacturing in the US, and consumer costs for vehicles will rise. If no revisions are made to the latest announcement, S&P Global Mobility expects U.S. light-vehicle sales could migrate to between 14.5 and 15 million units annually in the coming years. | S&P Global

Automakers can respond to President Trump’s new 25% tariffs on imported cars and parts in several ways. But all of them cost money and will lead to higher car prices, analysts say. Manufacturers can try to move production from countries like Mexico to the United States. They can try to increase the number of cars they already make here. They can stop selling imported models, especially ones that are less profitable. But whatever carmakers decide, car buyers can expect to pay more for new and used vehicles. Estimates vary widely and depend on the model, but the increase could range from around $3,000 for a car made in the United States to well over $10,000 for imported models. | The New York Times ($)

Mercedes-Benz is considering withdrawing its least expensive cars from the US because President Donald Trump’s auto tariffs would likely make their sales economically unfeasible. | Bloomberg ($)Trump says cars made in the U.S. will face “absolutely no tariff,” but it’s not so simple. No vehicle is built from 100% U.S. parts—not even the U.S.-made pickup. The Wall Street Journal takes a look inside a Ford F-150 to understand how automakers will be affected. | The Wall Street Journal ($)

On Saturday, as Elon Musk was making headlines for his continued efforts at DOGE and dodging a lawsuit for offering money to Wisconsin voters ahead of the state’s Supreme Court race, thousands of people were outside Tesla dealerships around the world protesting him. The grassroots Tesla Takedown movement—a series of demonstrations against Musk, Trump, and what the two of them have wrought, in front of Musk’s most prominent business—had been gathering steam for weeks, and March 29th was billed a “global day of action.” Protests were held in more than two hundred and fifty cities worldwide, organizers say. | The New Yorker ($)

Tesla’s sales have been on a steep downward trend around the world: The company said on Wednesday that its global sales in the first quarter fell 13% from a year earlier. Tesla said that it delivered nearly 337,000 cars during the quarter, down from 387,000 in the first three months of 2024. The tepid sales reflected a number of serious problems at the company, not least a consumer backlash against the prominent role that Elon Musk, the chief executive, is playing in the Trump administration. | The New York Times ($)

Glenn Mercer reports that despite Tesla's aggressive focus on removing costs from their supply chain and production facilities, over the course of about five years the total cost reduction for a Model 3 Long Range AWD produced at the Fremont facility is only about 6%. | Glenn Mercer

At the beginning of 2025, 18,311 U.S. franchised dealerships existed, according to the Automotive News annual dealer census, up by 171 stores from a year earlier. The number of dealerships has generally declined since 1941, when Automotive News counted 47,133, according to the Automotive News Research & Data Center. According to the the National Automobile Dealers Association (NADA) Data 2024 Mid-Year Report, 91.4% of dealership owners own between one and five stores, a figure that decreased from 95% in 2014, as dealerships have been absorbed in consolidation. | Automotive News ($)

There are two main reasons why vehicles are bigger in the U.S., says Ed Kim, the president of automotive marketing research AutoPacific. “Ultimately, it comes down to the price of fuel,” he says. “Sure, we Americans complain about the price of gasoline, but the reality is that gasoline is taxed far less than almost any other country in the world.” In other words, he explains, cheap fuel allows Americans to drive far larger vehicles and less fuel-efficient vehicles compared to drivers in most other parts of the world. Related, American roads are designed to accommodate the larger vehicles we have due to the cheaper fuel we’ve historically had. Streets are wide, and even most parking spaces are sized to accommodate larger vehicles. | Popular Science

⚡️ EVs

Over the past few years, electric vehicle manufacturing facilities producing lithium batteries, car parts and critical minerals sprang up all over the United States. Drawing on cash and tax credits from the Inflation Reduction Act, these factories promised to provide jobs — largely in Republican areas — and to set the nation on a path to making homegrown EVs. But even before President Donald Trump’s sweeping tariffs on imports, many of those projects were being canceled — leaving thousands of jobs and the shift to clean energy in doubt. According to data from Atlas Public Policy, a policy research group, more projects were canceled in the first quarter of 2025 than in the previous two years combined. Those cancellations include a $1 billion factory in Georgia that would have made thermal barriers for batteries and a $1.2 billion lithium-ion battery factory in Arizona. | The Washington Post ($)

🇨🇳 China

China’s BYD enjoyed a strong start to 2025, with sales up 58% in the first quarter versus the same period of last year. The nation’s best-selling auto brand delivered 371,419 passenger vehicles in March, bringing the total for the first three months of the year to 986,098, data released April 1 show. Of those, 416,388 were pure electric vehicles. BYD stopped making combustion engine cars in 2022 and now only produces EVs and hybrids. The results will likely be in stark contrast to U.S. rival Tesla, which only makes EVs and whose first-quarter sales may be as low as 340,000, according to some analyst estimates, or possibly around the 377,000 mark. Tesla CEO Elon Musk’s involvement in politics is hurting the EV brand, leading to a sharp sales slump across Europe and the U.S. In China, where Tesla has a large factory on the outskirts of Shanghai, the company is more being hurt by intense competition from home-grown competitors like BYD. | Automotive News ($)

Two of China’s biggest state-owned automakers are in advanced discussions to merge, in a deal that would create a formidable manufacturer of cars and military vehicles but could also create problems for their American and Japanese partners. Dongfeng Automobile and Changan Automobile have conducted detailed talks on how to combine their operations and told their foreign partners of their intentions, said two people with detailed knowledge of the discussions who were not authorized to comment. Although little known outside China, each company produces slightly more cars for its own brands and through joint ventures than global automakers like Mercedes-Benz AG or BMW Group. Dongfeng and Changan together make about 5 million cars a year — more than Ford and almost as many as GM or Stellantis, the giant that owns Fiat, Chrysler and Peugeot. A merger of Dongfeng and Changan would represent a significant consolidation of China’s auto market, the world’s largest, and another sign of the country’s rapid embrace of electric vehicles. Both companies have considerably more factory capacity for producing gasoline-powered cars than they need. | The New York Times ($)Chinese investment has been a bonanza for Mexico, creating almost 135,000 jobs in the past four years. The investments have helped Mexico surpass China to become America’s top trading partner in 2023, with two-way trade near $800 billion and rising to $840 billion in 2024. Mexico is under pressure from the Trump administration to show they can police Chinese investment and make sure companies comply with existing trade rules. Negotiations to renew the trade agreement, if it survives, are expected to start soon. The U.S. has been pushing Mexico to tighten investment restrictions on Chinese companies. One concession floated by Mexico involved matching the U.S. on China tariffs, said people familiar with the negotiations. That would cost Chinese companies, which import nearly all their factory machinery and sophisticated components into Mexico from China. Mexican officials have halted plans by Chinese electric-vehicle maker BYD to open a factory in the country, fearing such a move would anger Trump. | The Wall Street Journal ($)

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Autonomy & Robotics

Dozens of companies are building robots that look like humans. One of them is training a machine to be a butler and will soon test them in homes. | The New York Times ($)

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Connectivity

Deere & Co. last week filed an answer to the Federal Trade Commission’s lawsuit alleging the tractor manufacturer holds a monopoly over its repair services, unfairly drives up costs and restricts farmers from fixing their equipment in a timely manner. Attorneys defended the John Deere maker in Illinois federal court, taking the original 37-page complaint apart piece by piece with answers for nearly every paragraph, repeatedly denying allegations that its “business practices are unlawful.” Deere representatives also sought dismissal of the FTC’s lawsuit, which was filed in Jan. 15 with attorneys general from Illinois and Minnesota. Arizona, Michigan and Wisconsin have since joined the suit. | Manufacturing Dive

✈️ Aviation & Space

Airbus is to test a radical engine with visible fan blades as the world’s largest plane maker gears up to develop a successor for its best-selling A320 family of jets. The European aerospace and defense group said test flights of a demonstrator of the “open fan” engine would take place on a modified A380 superjumbo towards the end of this decade. Airbus hopes that the new engine configuration will contribute to an expected 20 to 30 per cent fuel efficiency improvement compared with existing models. Current types use “ducted fan” engines, where the fans are enclosed within a casing. | Financial Times ($)

An engineer says he’s found a way to overcome Earth’s gravity. This new propulsion system could rewrite the rules of spaceflight—not to mention completely defy conventional physics. Discovering a machine that could somehow produce thrust without releasing propellant would be a game-changer for human space travel. There’s just one problem—such a device would defy the laws of physics. | Popular Mechanics

🚘 Car of the Week

Our Automotive Ventures "Car of the Week": Michael Schumacher’s Monaco Grand Prix-Winning Ferrari F2001. | RM Sotheby's

Have a great week,Steve Greenfield

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📺 In The News

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Steve had a chance to catch up this week with Jim Fitzpatrick from CBT News to discuss automotive tariffs, dealer profitability, and the future of U.S. auto manufacturing. | CBT News ($)

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Automotive Ventures is very excited to announce our participation in EVident Battery's $3.2 million seed funding round, investing alongside Ibex Investors, Nationwide Ventures, and Avesta Fund. | Evident Battery

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On this week's "Future of Automotive" segment on CBT News, we discuss America's love affair with trucks and SUVs. | CBT News ($)

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👀 Companies to Watch

🌟 MACH provides the most advanced and commercially proven autonomy solutions in the industry. | Mach.io

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