Figure 2-2 The most "American" models in 2024

The impact of tariff policies on different car companies varies depending on their production layout, market dependence and response capabilities. The analysis of current mainstream car companies can conclude: who is the biggest loser of tariffs?

Hyundai Motor Group (Hyundai + Kia): The biggest loser

Hyundai Motor Group is the biggest victim of the tariff. In 2024, it will sell 1.77 million vehicles in the United States, of which 1 million will be exported from South Korea, accounting for 56%. The 25% tariff will drive up the cost of about $5,000 to $7,500 per vehicle, forcing it to increase prices. As an emergency response, Hyundai has just announced a $21 billion U.S. investment plan, including expanding its electric vehicle plant in Georgia to 500,000 units.

However, it will take several years for new production capacity to be implemented, and the pressure on South Korea's exports cannot be alleviated in the short term. Shares fell 4.28% (Kia fell 3.45%) and lost $16.5 billion in market capitalization, reflecting pessimistic expectations for its prospects.

Hyundai's cost-effective advantage in the US market will be damaged, and competition with Japanese and German brands will intensify. If it cannot effectively localize production, its profit margins may fall to negative values, and the South Korean economy will also be under pressure.

Japanese car companies (Toyota, Honda, Nissan, etc.): pressure is dispersed

Japan exported 1.37 million vehicles to the United States in 2024, accounting for 28.3% of its automobile exports, making it the largest single market. The tariffs will push up the cost of each car by about $5,000, with Toyota, Honda, Nissan, Mazda, and Subaru falling 4%, 3%, 3.5%, 5%, and 6% respectively, and the Nikkei index falling more than 1,500 points.

However, due to brand dispersion and localized production (such as Toyota's plant in the United States with a production capacity of more than 1 million vehicles), the impact of Japanese car companies is relatively controllable.

The decline in vehicle exports will also affect steel, logistics and other industries, and 5.58 million employed people will be under pressure. Japanese automakers can mitigate the impact by expanding production in the United States and optimizing supply chains, but profit margins will be squeezed. The position of a highly profitable source in the US market may be shaken.

Tesla and American car companies (GM, Ford): benefit, but still need to wait and see

Tesla produces locally throughout the United States and is protected from the direct impact of tariffs. The price increase of imported competing products has made it more cost-effective, and the stock price rebounded after the tariff news. However, Q1 deliveries in 2025 were only 337,000 units, down 13% year-on-year, and sales continued to be under pressure due to the "anti-Tesla" wave. It is worth noting that although Tesla does not have to pay vehicle tariffs, about 65% of its components rely on overseas suppliers (chips, materials), and if semiconductor tariffs are implemented, the cost of each vehicle may increase by $188 to $219.

In the short term, Tesla benefits from rising costs for competitors, but in the long term, sales bottlenecks and supply chain risks need to be addressed. Musk denies policy favoritism, but his political capital remains an advantage.

GM and Ford account for a high proportion of production in the United States, and the Mexican plant is protected by the USMCA, so the impact of tariffs is small. However, its supply chain relies on overseas components, and costs will rise slightly. U.S. automakers can benefit from localized production, but if the trade war escalates, their European and Asian markets may be affected by retaliatory tariffs. Short-term small profits can be expected, and long-term vigilance needs to be vigilant against global market countermeasures.

Chinese car companies: Wait and see

China's exports to the United States in 2024 will only be 116,000 units, basically GM, Ford, and Tesla producing vehicles in China, and the direct impact of tariffs on them is limited.

China has expressed its opposition to the "weaponization" of trade and may impose retaliatory tariffs on US exports. However, given that the focus of automobile exports is in Europe and Southeast Asia, the loss of the US market has little impact on its overall strategy. U.S. tariffs are "watching from the sidelines" for us, and there are no obvious losses in the short term.

Impact on China

From the data point of view, the impact of this tariff on China's auto industry is very limited. According to data from the Passenger Car Association, China will export about 116,000 cars to the United States in 2024, accounting for only 1.81% of China's total automobile exports, less than 2%. For domestic car companies, the United States has long been regarded as a "high barrier, low priority" market, and major Chinese car companies such as BYD have "no plans to enter the US market".

In fact, the impact of the tariffs on China's automotive industry is far greater than expected.

China has indeed gradually reduced its direct automobile exports to the United States. However, there is still a market size of more than 100,000 units, and behind this, most of them are joint venture car companies supplying to North America with the help of China's local production capacity. Among them are some old American local car brands, and supplying to North America is precisely an important reliance on them to maintain their existing performance in China.

As the most direct undertaker of the tax increase, in the short term, it is a sudden increase in costs and a production line that is difficult to maintain; It has also impacted their confidence in whether they will continue to increase their investment in China. Previously, there was news in the industry that the intention to renew the contract was still unclear after the expiration of the Sino-foreign cooperation bank of a joint venture car company.

However, people of insight are still increasing their investment in the Chinese market. Valeo GroupDuring his visit to China, CEO Christophe Périllat called China the gym of the global automotive industry.

Compared with the whole vehicle, key component companies, including power batteries, may be more affected.

According to data from the U.S. Department of Commerce and the China Association of Automobile Manufacturers, China's auto parts exports to the United States in 2024 will be $18.26 billion, accounting for about 17.3% of total exports. However, it is still difficult to predict how big the impact will be. It is unclear whether auto parts from China are subject to the low tax rate of Section 232 or the high tax rate according to the equivalent tariff, in addition to higher costs, tariffs may also bring impact such as delayed delivery, which in turn affects vehicle manufacturing.

Tariffs have a greater impact on energy storage batteries.

The United States is China's largest exporter of lithium batteries. According to the analysis of Dongxing Securities, the export scale of our country power and energy storage batteries will reach 197.1GWh in 2024, a year-on-year increase of 29.2%, of which power and energy storage batteries will account for 68% and 32% respectively, and exports to the United States will account for 25% (US$15.32 billion) and 23% (US$2.03 billion) of the total export value of lithium batteries, respectively our country.

After this tariff, China's export tariffs on lithium batteries to the United States have reached a high level, and export battery prices are expected to rise sharply. According to the analysis of Dongxing Securities, energy storage batteries are more affected by this round of tariffs. Taking 2024 as an example, China exported less than 30,000 new energy vehicles to the United States, accounting for 1.4% of the total new energy vehicle exports, and the corresponding power battery installed export scale was less than 1.8GWh, accounting for a very small proportion. However, China's exports of energy storage batteries to the United States reached US$6.27 billion, accounting for 57% of the total US imports, corresponding to about 35GWh-40GWh demand.

According to media reports, EVE Lithium Energy revealed in response to investors' questions on April 7 that the current contracts signed by EVE and American customers are all settled at FOB prices, that is, FOB prices, and suppliers are only responsible for the part before the goods leave the Chinese port, and the subsequent transportation, tariffs, landed port fees, etc., are borne by the customer. In the face of the sudden increase in ultra-high tariff costs, U.S. customers may use force majeure clauses to terminate contracts, which will adversely affect the annual capacity planning already done by Chinese battery companies.

Depending on the completion of overseas localization layout, import and export volume and distribution, and product added value, different enterprises feel uneven.

For example, Joyson Electronics, a well-known parts company in Ningbo, has been deployed overseas for about 15 years, and currently has corresponding R&D centers and manufacturing bases in major automobile producing countries around the world. Joyson Electronics' import and export business accounts for a small proportion and is less affected by Sino-US tariff policies.

However, the overseas layout is early, and it involves airbags, seat belts and other necessary automobile items, and the global market share is high, and the impact of tariffs on it has limited reference value for other companies.

Due to the previous epidemic and global supply chain security considerations, many international parts have adjusted their previous layout methods and laid out their production lines globally, close to the layout of the local consumer market.

For our country, the biggest problem is that the US tariff war may still be the prelude, which may further affect the layout of some auto parts companies in China and slow down the pace of investment in China. At the same time, it may increase macroeconomic pressure and affect consumers' demand for cars.

Since the imposition of tariffs and the provocation of a trade war during Trump's first term, many Chinese companies have accelerated or begun to expand overseas, localize some production capacity, or transfer them to countries with more stable relations with target exporters and better tax rates, such as Mexico. However, it is worth noting that in addition to China, Trump's reciprocal tariffs also cover traditional trading partners such as the European Union, Japan, South Korea, Thailand and Vietnam. and a permanent tariff of 25% is imposed on imported cars.

China's response measures are on the way. According to Xinhua News Agency, on April 9, the General Administration of Customs of China issued an announcement stating that according to the relevant announcement of the Customs Tariff Commission of the State Council, from 12:01 on April 10, 2025, an additional 84% tariff will be levied on all imported goods originating in the United States on top of the current applicable tariff rate.

Regarding the tariff policy of the United States, the China Association of Automobile Manufacturers (hereinafter referred to as the "China Association of Automobile Manufacturers") issued a statement saying that automobiles are a highly international industry, and through an efficient multinational supply chain system, the optimal allocation of global resources is realized, providing users around the world with safe and convenient transportation and logistics tools.

The sudden reciprocal tariffs of the United States and the tariffs imposed by various countries in response have made the future of the automotive industry confusing. Looking at the overall situation, after the Trump administration came to power, it showed a strategic tendency to use economic power and trade policies to force trading partners to regain their sides, and this round of reciprocal tariffs is only a manifestation of this strategy.