Wedbush analyst Dan Ives cautioned Monday that proposed U.S. tariffs on imported cars and auto parts could severely strain the global auto industry. He warned that the additional costs could increase the price of a typical car by $5,000 to $10,000 almost immediately.
Calling the notion of a fully American-made vehicle “a fictional tale,” Ives said the tariffs could throw supply chains into disarray. He added that relocating even 10% of the supply chain to the U.S. could take three years and require hundreds of billions in investment.
The estimated cost to the industry could hit $100 billion annually, most of which would be passed along to consumers, Ives said. Existing supplier agreements and long lead times to build new domestic facilities—estimated at four to five years—compound the challenge.
Tesla (TSLA, Financial) is also expected to feel the impact, along with General Motors (GM, Financial) and other major manufacturers. Ives described the policy as a source of confusion and strain for automakers and investors worldwide.
