More stories

  • in

    GM Cuts Profit Forecast by 20% and Says Auto Tariffs Will Cost It Billions

    General Motors now expects to earn a lot less than it did before President Trump imposed 25% tariffs on imported cars and auto parts.General Motors cut its profit forecast for 2025 on Thursday by more than 20 percent and said that the Trump administration’s tariffs would increase its costs by $4 billion to $5 billion this year.In a conference call with analysts, G.M. executives said the company now expects to make $8.2 billion to $10.1 billion this year, down from a previous forecast of $11.2 billion to $12.5 billion.“G.M.’s business is fundamentally strong as we adapt to the new trade policy environment,” the company’s chief executive, Mary T. Barra, said.In April, President Trump imposed tariffs of 25 percent on imported vehicles and will begin imposing the same duty on imported auto parts on Saturday. On Tuesday the president modified how the tariffs are applied to give automakers some relief, including partial reimbursement for tariffs on imported parts for two years.Ms. Barra said G.M. hopes to offset about 30 percent of the impact of the tariffs by increasing production in U.S. plants, cutting costs, and working with suppliers to raise their domestic production of parts and components.G.M. had previously said it was increasing pickup truck production at a plant near Fort Wayne, Ind., which will reduce the number of vehicles it imports from Canada and Mexico. Ms. Barra said output at the Fort Wayne factory would increase by about 50,000 trucks this year.She also said G.M. now plans to make more battery modules in its U.S. plants to raise the portion of domestic content in its electric vehicles.About $2 billion in tariff-related cost increases will come from vehicles that are made in Canada, Mexico and South Korea and sold in the United States.Analysts have predicted that the tariffs will add thousands of dollars to the cost of new cars and trucks, and some or all of that would be passed on to consumers. In the call, G.M.’s chief financial officer, Paul Jacobson, said the company now expects new vehicle prices to rise 0.5 percent to 1 percent this year, he added. Previously, the company had forecast that pricing would fall by 1 percent to 1.5 percent.Other automakers are also planning to produce more vehicles in the United States. Mercedes-Benz said Thursday that it would build a new vehicle at an Alabama factory as part of what the German carmaker called a “deepening commitment” to manufacturing in the United States.While the company did not mention tariffs, Mercedes and other carmakers have been at pains in recent weeks to emphasize how many cars they already build in the United States and their plans to make more. Mercedes did not provide details about the car, except to say that it would be a new design tailored to the U.S. market and begin production in 2027.The company’s factory near Tuscaloosa, Ala., primarily assembles luxury sport utility vehicles, including electric models, for sale in the United States and export to other markets.Jack Ewing More

  • in

    Tesla U.S. Sales Plunge as G.M. and Others Make Gains

    Tesla’s sales in the United States fell almost 9 percent in the first three months of the year even as the overall market for electric vehicles grew, according to data compiled by a research firm.Car buyers are moving away from Teslas and toward models like General Motors’ Chevrolet Equinox electric vehicle, which starts at around $35,000 and can travel more than 300 miles on a charge, Cox Automotive, the research firm, said in a report.Sales of all electric vehicles in the United States rose 11 percent during the first quarter to about 300,000 cars and light trucks, Cox said, much faster than the overall auto market, which has been flat. About 8 percent of new domestic car sales were electric, Cox said, a slight increase from 2024.“Despite many obstacles — and what you may read elsewhere — electric vehicle sales continue to grow at a healthy pace in the U.S. market,” the firm said.Tesla, whose chief executive is Elon Musk, still sells far more electric cars in the United States than any other automaker, accounting for 44 percent of the market, according to Cox. But its share has fallen from 51 percent a year earlier.The decline in Tesla’s U.S. sales mirror a global slump. The company said this month that deliveries during the quarter in all markets fell 13 percent to 337,000 vehicles.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Trump Says He ‘Couldn’t Care Less’ if Auto Tariffs Raise Car Prices in the U.S.

    President Trump has said that “tariffs are the greatest thing ever invented.” For someone who once called himself a “tariff man,” tariffs are the solutions to many economic problems.He has argued that imposing tariffs would protect American factories, spur manufacturing, create new jobs and bend uncooperative governments to his will. Since his inauguration, while imposing and then suspending and then imposing tariffs again, Mr. Trump has upended the global trading system.But over that time Mr. Trump has also begun conceding that tariffs could cause financial discomfort for Americans. That possibility came up in stark terms in an interview with NBC’s “Meet the Press” from Saturday, when Mr. Trump said that he “couldn’t care less” about the prospect of higher car prices.The president repeated the sentiment twice when asked about the 25 percent tariffs on imported cars and auto parts that he has promised will go into effect on Thursday. He told the NBC News host Kristen Welker that the tariffs were permanent, and that he would encourage auto companies and their suppliers to move to the United States.In one exchange, Ms. Welker asked Mr. Trump if he was at all concerned with the effect of tariffs on car prices, which experts have said could go up by thousands of dollars. “No, I couldn’t care less,” he said, “because if the prices on foreign cars go up, they’re going to buy American cars.”After the interview, an aide to the president told NBC that Mr. Trump was referring to the increase in foreign car prices.While the White House sought to emphasize foreign-made vehicles, the tariffs will affect American companies like Ford Motor and General Motors, which build many of their vehicles in Canada and Mexico. Nearly half of the vehicles sold in the United States are imported, according to S&P Global Mobility data, and almost 60 percent of auto parts in cars assembled in the country.A study by the Yale Budget Lab, a nonpartisan research center, forecast that tariffs would cause vehicle prices to increase by an average of 13.5 percent — an additional $6,400 to the price of an average new 2024 car.On Sunday, Shawn Fain, the president of the United Automobile Workers union, said that the tariffs were indeed a “motivator” for carmakers to bring jobs back to the United States. But, he said on CBS’s “Face the Nation,” they were not an “end-all solution” to help American auto workers. If jobs are being brought back to the United States, Mr. Fain said, they need to be “good paying union jobs that set standards.”Peter Navarro, a senior trade adviser to Mr. Trump, defended the tariffs and said they would raise about $100 billion, which would translate to tax credits for people who buy American cars. He, too, told Americans not to worry about the effects of the tariffs.Instead, he said on Sunday, they should “trust in Trump.” More

  • in

    Trump Auto Tariffs: How Major Car Brands Would Be Affected

    The tariffs on cars and auto parts that President Trump announced on Wednesday will have far-reaching effects on automakers in the United States and abroad.But there will be important differences based on the circumstances of each company.TeslaThe company run by Mr. Trump’s confidant, Elon Musk, makes the cars it sells in the United States in factories in California and Texas. As a result, it is perhaps the least exposed to tariffs.But the company does buy parts from other countries — about a quarter of the components by value in its cars come from abroad, according to the National Highway Traffic Safety Administration.In addition, Tesla is struggling with falling sales around the world, in part because Mr. Musk’s political activities and statements have turned off moderate and liberal car buyers. Some countries could seek to retaliate against Mr. Trump’s tariffs by targeting Tesla. A few Canadian provinces have already stopped offering incentives for purchases of Tesla’s electric vehicles.General MotorsThe largest U.S. automaker imports many of its best selling and most profitable cars and trucks, especially from Mexico where it has several large factories that churn out models like the Chevrolet Silverado. Roughly 40 percent of G.M.’s sales in the United States last year were vehicles assembled abroad. This could make the company vulnerable to the tariffs.But unlike some other automakers, G.M. has posted strong profits in recent years and is considered by analysts to be on good financial footing. That could help it weather the tariffs better than other companies, especially if the levies are removed or diluted by Mr. Trump.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Who’s Got Trump’s Ear on Tariffs? Lutnick or Navarro?

    Corporate leaders and investors continue to be caught off guard by the president’s trade policy, especially as deal talks heat up. Looking for tariff relief? Howard Lutnick, the commerce secretary, appears to be one to call.Tierney L. Cross for The New York TimesWho’s in the room President Trump’s tariff policy has given corporate chiefs and investors a serious case of whiplash. While the markets cheered on Wednesday’s delay on auto sector levies, setting off an impressive late-day rally, the move also adds to the confusion about what comes next.The latest: There’s increasing buzz that agricultural products are next in line for tariff relief, as the president faces intense lobbying from his party. And the release on Wednesday of the Fed’s beige book survey of regional activity showed that companies were growing worried that the levies would push up prices.One school of thought on Trump’s tariff plans: they could level the field before negotiations. Trump himself sees them as a tool to bolster the U.S. economy.A way to think about this is to look at the people in his orbit. On tariffs, there are two key, and seemingly polar opposite, figures.There’s Howard Lutnick, the former head of Cantor Fitzgerald who is a moderate on trade and now commerce secretary. And there is Peter Navarro, a longtime Trump lieutenant and a proponent of high tariffs who is generally opposed to trade deals.Who has more influence? For now, it seems to be Lutnick. Trump’s announcement of a one-month pause on tariffs on cars coming through Canada and Mexico wouldn’t have surprised anyone who heard Lutnick’s comments earlier in the day.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    ‘Democrats are losing’: a battle on EVs could cost Kamala Harris votes in Michigan

    As the critical swing state of Michigan hangs in the balance, experts warn that Democrats’ poor messaging over the shift to electric vehicles could lose them the state in November’s election.“I will end the electric vehicle mandate on day one, thereby saving the US auto industry from complete obliteration, which is happening right now,” Donald Trump told the Republican national convention in a speech this summer that would reach tens of millions of people.Despite his burgeoning friendship with Tesla’s Elon Musk, Trump has remained a consistent critic of EVs and battery-powered vehicles more generally. The messaging has resonated with many United Auto Workers (UAW) members, eroding Joe Biden’s support among union members in Michigan by as much as 25 points since the 2020 election.The claim that EVs require less labor is probably not true: multiple studies and industry executives have said it takes about as much or more labor to produce EVs. Still, the Biden-Harris campaign has not pushed that essential point, and in the process is losing the messaging war over EVs, imperiling Democrats’ chances in tightly contested Michigan as union support sputters, according to Bernie Porn, an Epic-MRA Michigan pollster.“Biden and Democrats are doing a lousy job on messaging [on EVs],” said Porn. “Democrats are losing support … but they’ve been silent.”Autoworker votes are critical to Michigan and other must-win upper midwest industrial swing states – Trump won there by a narrow 10,000 votes in 2016.Biden retook the state with broad union support four years later, but by late 2023, union members here preferred Trump over Biden by a 47-40 margin, Epic-MRA found. Following the UAW endorsement early this year, Biden’s support among unions bounced up to 52% – but still 13 points below the last election.About 55% of state residents are also opposed to the EV transition, polling found.Trump’s claim that the EV transition represents the US auto industry’s death knell began to deeply worry union members as Biden guided the nation into the EV transition via the billions of dollars of investment in the Bipartisan Infrastructure Act and Inflation Reduction Act.Trump regularly claims EVs require up to 40% less labor to make than gasoline cars, a statistic repeated by Brian Pannebecker, who backs Trump and is a former UAW member.Even with the evidence that EVs take the same or more time to produce, skepticism among many autoworkers persists, he said.“Of course we’re not going like that,” Pannebecker said. “We’d be suicidal or stupid if we did.”But Trump’s claims are not true, and the job-creating power of EVs is “the biggest secret in politics”, said Mike Murphy, a Republican with the EV Politics Project, a non-profit that pushes for stronger EV policy.Its recent focus groups and polling found people across the political spectrum are more supportive of EVs when they learn that it creates jobs, and EV Politics Project is planning to air a television commercial that hits on that point in the coming weeks.“I don’t know why the Biden-Harris administration has been so bad at telling the story,” Murphy added. “They need to go on the offense.”Democrats could point to recent General Motors statements on the issue.“We’ve done our own analysis at General Motors, and there are other studies that have affirmed that the employee base needed in the future for EV production is very similar to what’s needed for a comparable [internal combustion] vehicle today,” GM executive Gerald Johnson said.GM is building a massive new battery plant in Michigan, which has the most announced battery production nationwide. At least seven plants have opened or are in the works, and UAW leadership has been supportive of the EV expansion.A spokesperson for UAW said support for the EV transition among union members was strong, dismissing opposition within its ranks as rooted in partisan politics.Parsing EV productionThe idea that EV production requires fewer hours can be traced back to several out-of-context comments made by auto executives and companies underestimating the time demands in 2017, a Heatmap analysis found.Trump has run with the comments, and the messaging has bounced around the echo chamber without much media scrutiny. On its face the claim makes sense – EVs require fewer parts in their powertrain, so it takes less time to assemble.The powertrain is what propels the car, and in gas-powered vehicles it contains over 1,000 parts that make up the engine and transmission. An EV powertrain is seemingly simpler – just a few hundred components with batteries, electric motors and power management systems.But industry observers say the claims about labor hours seem to omit battery packs. And when every component and the complexity of the EV powertrain production process is factored in, it takes about the same or more time to put it together, a recent Carnegie Mellon study found.The research used shop floor level data and interviews with autoworkers at nine plants to determine how long it takes to make each EV powertrain part. The researchers found EV powertrains require about two to three times more labor to produce than gas – up to 11 worker hours per gas powertrain compared with up to 24 worker hours for a battery powertrain.“You need to unpack the black box of the production process to figure out whether the assembly time reduction was outweighed by an increase in fabrication complexity,“ said Christophe Combemale, a study co-author. “We can say very strongly at the moment the evidence suggests it takes as many or perhaps more labor hours to produce [an EV powertrain].”Recent University of Michigan research took a different approach. It examined output at three factories where EV production replaced gas production. It found output is higher at gas plants, meaning more hours are required to build EVs – a former California GM/Toyota plant produced 80 vehicles per person per year, while a Tesla plant now in the facility averages 30.Researchers at the Boston Consulting Group came to a similar conclusion in an analysis that looked at an entire car’s assembly. It also noted time-consuming complexities in EV production, like the battery pack’s heavy weight, which requires the rest of the car to be much lighter than a gas-powered vehicle. The Tesla Model S battery pack weighs more than half a ton, which is offset by using aluminum instead of steel, as is standard with gas vehicles, the paper notes.However, aluminum is “trickier to work with in a factory” because it is comparatively weak, the paper states, demanding expensive adjustments like spot welding to shore up its strength. The installation of the charging unit, additional wiring, battery loading and alignment all require time not needed in gas assembly.“This is a significant change for an industry that has spent more than 100 years developing and improving engine manufacturing and vehicle assembly to the highest degrees of efficiency,” the paper states.CaveatsAs the nascent EV production process matures, automakers will find efficiencies that will reduce the manufacturing time. Meanwhile, while the EV market is growing, sales have been slower than expected, and some Michigan plants have recently laid off workers or scaled back employment figures.In his critique of EVs, Pannebecker, the Trump-backing former UAW member, pointed out the most obvious caveat to research showing they take more hours: batteries and their components largely are not made in the US at the moment, so they are not of use to the UAW.“No matter which way you look at it, it’s a losing proposition for autoworkers,” Pannebecker said.As much as 80% of lithium ion batteries are estimated to be produced in China, but that is changing. A slew of battery plants are scheduled to come online in the US in the coming years in addition to more than 30 already operating, and five of those will be in Michigan.Even if those plants are built, Pannebecker noted, many of them are not unionized and only pay $15-$18 an hour. Near Youngstown, Ohio, an Ultium battery plant near the once-storied GM Lordstown plant suffers from high turnover because of the low pay that workers there say is in line with a local Waffle House.But that is also changing. Late last year and early this year the UAW made battery plants a priority in its negotiations with automakers, and the plants’ workers can now unionize.Meanwhile, the Chips and Science Act aimed at reshoring the semiconductor industry that produces critical components to EVs is also helping shift component production to the US. Combemale said there is some potential for autoworkers to be retrained or take on jobs in semiconductor plants or other higher tech settings than a shop floor.Still, this broad narrative does not seem to be reaching many Michiganders, whether in a union or not. The most recent polling shows only 56% of Michigan union members approve of the EV transition – far below the 74% of Democrats who approve of it. Meanwhile, union members’ families disapprove by a 51-45% margin, and support among independent voters is even lower.But it’s not too late to change the messaging for this election, and into the future, said EV Politics’ Murphy. Part of the problem may be generational within union ranks – older guys are less supportive because they won’t be around as the EV transition progresses, Murphy said.Democrats need to stop making EVs an environmental issue, which will “divide the voters in half”, Murphy said, and instead push the job creation narrative. His focus groups found an up to 19-point improvement on EV approval rating when messaging focused on the latter.“It’s a very powerful way to reframe the argument,” Murphy said. “It’s one of the best bragging rights they’ve got. This isn’t hard, it’s just a story no one knows.” More

  • in

    Trump Floats I.V.F. Coverage Mandate While Campaigning in Michigan

    The week after Democrats spent much of their national convention attacking him over his position on abortion rights and reproductive health, former President Donald J. Trump said on Thursday that he would require insurance companies or the federal government to pay for all costs associated with in vitro fertilization treatments if he is elected in November.Mr. Trump’s announcement — made in an NBC interview, a speech in Michigan and a town hall in Wisconsin — came with little detail about his proposal or how he might address its cost. For one cycle, the treatments can cost up to $20,000 or more. But he has been trying to rebrand himself to voters on reproductive access and abortion rights, issues that have cost Republicans at the ballot box.Mr. Trump, who often on the campaign trail has bragged about his role in appointing Supreme Court justices who voted to overturn Roe v. Wade, last week on social media declared that his administration “will be great for women and their reproductive rights,” a phrase used by abortion-rights advocates.The post appeared to be an effort by Mr. Trump to cast himself as more of a political moderate on abortion, an issue that could hurt him in November.On Thursday, Vice President Kamala Harris’s campaign accused Mr. Trump of trying to run from his record on abortion access.“Trump lies as much if not more than he breathes, but voters aren’t stupid,” Sarafina Chitika, a spokeswoman for the Harris campaign, said in a statement. “Because Trump overturned Roe v. Wade, I.V.F. is already under attack and women’s freedoms have been ripped away in states across the country.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • in

    Elon Musk Says Robotaxis Are Tesla’s Future. Experts Have Doubts.

    Tesla says self-driving taxis will power its growth, but the company hasn’t said when such a service would be ready or how much it would increase profits.As sales of its electric cars have fallen, Tesla and its chief executive, Elon Musk, have sought to convince Wall Street that the company’s future lies not in the grinding business of making and selling cars but in the far more exciting world of artificial intelligence.In Mr. Musk’s telling, one of Tesla’s main A.I.-based businesses will be driverless taxis, or robotaxis, that can operate pretty much anywhere and in any condition. Tesla is very close to perfecting such vehicles and will easily secure regulatory approval to put them on roads, Mr. Musk said last week on a conference call to discuss the company’s second quarter results.Mr. Musk’s vision of autonomous vehicles, or A.V.s, is not limited to cars that drive themselves. He has also claimed that individuals who buy Teslas would be able to make money when they are asleep or at work by letting the company use their cars as robotaxis.The robotaxi service will, Mr. Musk has said, catapult Tesla’s stock market valuation, around $700 billion now, into the trillions of dollars.But first, a lot will have to go right.His idea would require major advances in technology and fundamental changes in the way people view cars. The experience of driverless taxi services like Waymo and Cruise in Phoenix, San Francisco and other cities raises questions about when such offerings will become profitable and how much money they will make.Tesla’s technology will face stiff competition from Waymo, a subsidiary of Alphabet, the parent company of Google; ride-hailing services like Uber and Lyft; and Amazon’s self-driving business Zoox. Carmakers including General Motors, which owns Cruise, are also pursuing autonomous driving, along with Chinese tech and auto companies like Baidu and BYD.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More