The U.S. auto market is entering a storm, and it’s one with global consequences. With former President Donald Trump’s sweeping new tariffs on imported vehicles back in the spotlight, automakers around the world are being forced to rethink their entire strategies. What began as political posturing is quickly becoming a high-stakes shake-up in one of the world’s most competitive industries.
But here’s the big question: Who’s getting hit the hardest? Who’s staying afloat? And what does this mean for people who just want affordable, reliable, clean cars?
Let’s break it all down—from the biggest losers to the companies quietly positioned to come out ahead.
European Automakers Are Taking a Big Hit
When it comes to bad timing, Europe’s carmakers might be in the worst position of all.
Take Germany, for example. The country’s economy has already slowed down, and auto sales were struggling even before tariffs entered the picture. Germany’s biggest player, Volkswagen (VW), is especially vulnerable. It relies heavily on exports from Mexico and Europe to serve the U.S. market—but those imports are now under heavy financial pressure due to new tariffs.
Right now, VW sells just three key vehicles in the U.S. that are made locally: the Atlas, Atlas Cross Sport, and the ID.4 electric SUV. That’s not much of a lineup to compete with homegrown rivals like Ford and Tesla.
Mercedes-Benz is slightly better off, since it has some U.S. production, but even then, most of its American-made vehicles depend on imported parts. Volvo’s plant in South Carolina is in the same boat—foreign parts powering supposedly local cars.
And BMW? Its American-built SUVs have only 9% U.S.-made components. That’s not a good look when the rules favor high domestic content.
The overall problem for European carmakers? Their home market is shrinking, highly regulated, and not very profitable. If globalization continues to fade and tariffs become the norm, Europe’s car giants may find themselves squeezed from all sides.
The Structurally Weak: Not Down Yet, But Vulnerable
Not every automaker is crashing just yet—but some are certainly skating on thin ice.
Stellantis
You might expect Stellantis (the parent company of Jeep, Chrysler, Dodge, and more) to be in serious trouble—and you’re not entirely wrong. The company has seen its cash reserves shrink by $9 billion over the past year, although it still has nearly $40 billion in the bank. Debt isn’t its main problem. The real issue? Stellantis was already losing money before tariffs were added to the equation.
So while they can afford some losses, a prolonged slowdown could cause major damage.
Nissan
Nissan is facing an even more delicate situation. The company’s new CEO, Ivan Espinosa, recently admitted they don’t have a “cash” problem—they have a “cash flow” problem. With $6 billion in cash and an equal amount in short-term debt, the math is simple: Nissan doesn’t have much runway if things don’t improve quickly.
Mazda
Then there’s Mazda. Nearly every Mazda vehicle sold in the U.S. is imported, and the company is too small to easily absorb tariff costs, keep up with fresh models, and build a solid EV lineup all at once. At best, it can pick one of those three priorities—and that’s a rough place to be.
In the Middle: Strong, but Not Untouchable
Some automakers are managing okay—but still face hurdles.
General Motors (GM)
GM builds many of its vehicles in the U.S., but some of its most promising EVs—the Equinox EV and Blazer EV—come from Mexico. It also imports a significant portion of its trucks from outside the country, which could become a liability if tariffs persist.
The company is still profitable and competitive, but that could change if the situation drags on.
Hyundai
Hyundai is another interesting case. The South Korean giant has plenty of cash and the support of a huge industrial conglomerate. It also benefits from strong ties to the South Korean government, which could step in with support if needed.
That said, most of Hyundai’s U.S. sales are still imports. It has started investing in American EV production, but those factories and facilities will take years to ramp up. In the short term, it’s going to feel the pain.
The Not-Quite Winners: Better Positioned Than Most
While no one escapes a trade war without a few bruises, a few automakers are in a much stronger spot to weather the storm.
Tesla
Tesla is in perhaps the best position of all. The company builds all of its U.S.-market vehicles inside the U.S., using over 60% American and Canadian parts. That means it avoids the biggest impact of import tariffs.
Still, Tesla isn’t immune to all risks. If tariffs raise demand for U.S. parts and labor across the board, Tesla could see higher costs. The company also relies heavily on selling regulatory credits, and if emissions rules are rolled back—as Trump has suggested—those credits could lose value fast.
Toyota & Honda
Both of these Japanese giants have spent years investing in North American manufacturing. That’s now paying off. Toyota and Honda both build their best-selling models—like the Toyota Camry and Honda CR-V—right here in the U.S.
But there’s a catch: their electric vehicles (EVs) are still imported. Under current regulations, carmakers have to sell a certain number of EVs to meet emissions targets. Selling those imported EVs without tariff protection will be expensive—and likely unprofitable.
Still, both companies have deep pockets. Toyota, in particular, has massive cash reserves that can help it ride out the turbulence.
Ford
Ford isn’t having an easy time building profitable EVs, but it does manufacture its most lucrative vehicles in the U.S.—like the F-150 and Expedition. Some of its popular models like the Mustang Mach-E and Maverick are made in Mexico, which poses some exposure.
That said, Ford is still better off than many of its competitors.
What This Means for Consumers
While automakers grapple with strategy and survival, there’s another big loser in all this: you—the consumer.
These new tariffs are expected to raise the cost of many vehicles, especially EVs. Combined with the lack of tax credits for imported EVs, this means fewer affordable, clean, and reliable options for American buyers.
In fact, many automakers are already pulling back on long-term EV investments due to the uncertainty. Europe is even considering loosening its emissions standards to remain competitive, while Trump has openly called for removing U.S. standards entirely.
In short, while tariffs may aim to strengthen domestic industry, they risk slowing down progress in the EV space—and making it harder for everyday people to afford the cars they want.
In any economic conflict, there are bound to be winners and losers. In this case, Europe’s automakers are feeling the most pain, while companies like Tesla, Ford, and Toyota are better equipped to ride out the storm.
But make no mistake—this isn’t a zero-sum game. Even the strongest players are making tough decisions, pulling back on investments, and bracing for higher costs.
At the end of the day, the biggest risk is that progress toward cleaner, more affordable transportation slows down. And that’s a loss for all of us.
If you’re planning to buy a car soon—especially an EV—keep a close eye on how this trade war evolves. The choices available to you may change more than you think.
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