Cars Are About To Get A Whole Heap More Expensive

Good morning! It’s Thursday, April 3, 2025, and this is The Morning Shift: Your daily roundup of the top automotive headlines from around the world, all in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’ll find out how tariffs on automotive imports are hitting German brands, and see just how much trade the new fees could impact in their first year. Plus, the White House confirms that Elon Musk isn’t going anywhere and the battle of the electric vehicle startups rages on.

It finally happened, president Donald Trump’s tariffs on the import of foreign cars came into effect yesterday hitting almost every corner of the American automotive industry. Now, the fallout of the 25% tax on imports is becoming clear, and it looks set to make cars a whole heap more expensive.

German automaker Volkswagen confirmed this morning that its prices will have to rise as a result of the automotive tariffs, while Mercedes-Benz says its entry-level models could fall victim to the new duties, reports Bloomberg. VW sent a memo to dealers outlining its plans to add import fees to the sticker prices of its vehicles sold in the U.S., while Mercedes could reevaluate its lineup to remain competitive as tariffs take effect:

The German automaker is mulling cutting sales of more entry-level models like the small GLA sport utility vehicle as part of broader tariff contingency plans, the people said, declining to be identified because the deliberations are private. Trump’s 25% duties are scheduled to take effect this week.

Carmakers from Germany are among the most impacted by the new import fees, reports Bloomberg, and the additional tariffs were described as a “fundamental turning point in trade policy,” by Hildegard Müller, the head of Germany’s auto lobby VDA. The remarks from VW and Mercedes come just days after Hyundai warned that price hikes were on the horizon. Rising prices of cars from the likes of VW and Hyundai could spell disaster at the cheaper end of the automotive spectrum, as additional fees on imports could spell the death of the cheap car and push the average new car price above $50,000 for the first time.

The new import levies that came into effect last night don’t just hit full cars brought into America for sale, but spread to all manner of car components as well. In fact, Reuters estimates that the tariffs will hit around $460 billion worth of goods sold in America if they remain in effect for a year.

While the tariffs on cars imported into America came into force yesterday, additional fees on around 150 different car parts will hit on May 3, reports Reuters. An additional 25% fee will be applied to components such as engines, transmissions, batteries, tires, shock absorbers, and even spark plugs from next month, as the site explains:

The list also includes automotive computers covered under the four-digit tariff code that includes all computer products, including laptop and desktop computers and disk drives. The category had imports of $138.5 billion in 2024, according to U.S. Census Bureau data. The total U.S. vehicle and parts imports excluding this category was $459.6 billion.

The list of components impacted by the new tariffs isn’t finalized, and Reuters warned that more components could be added to the list in the coming weeks or months. Whether new parts are hit with tariffs or not will all be decided via a new system being launched by the Commerce Department to allow domestic producers to request that other parts imports be targeted. The White House also confirmed today that vehicles that qualify under the U.S.-Mexico-Canada Agreement’s rules of origin will only be hit by the 25% duty on parts that aren’t made in the U.S.

Tesla revealed its sales figures for the first quarter of 2025 this week, and it’s not looking good. Company boss Elon Musk and his political stance appears to have alienated many buyers, as deliveries dropped more than 30% in the first three months of the year. Despite this, Musk isn’t going to be backtracking on his political career anytime soon.

The White House confirmed that Musk will stay on leading his questionable government department until his controversial job is finished, Automotive News reports. The billionaire will remain on as a special government employee until he completes his task of unnecessarily slashing government spending and gutting the federal workforce. In his role, Musk has just 130 days from the moment he was appointed to carry out his work, and that clock runs down towards the end of May. Trump previously said that Musk could finish his work for the government soon and return to the private sector, but the White House dismissed rumors that Musk is leaving anytime soon:

Trump has tasked the Tesla Inc. and SpaceX CEO with leading efforts through the Department of Government Efficiency to cut government funding and reshape the federal bureaucracy. “Elon Musk and President Trump have both publicly stated that Elon will depart from public service as a special government employee when his incredible work at DOGE is complete,” White House Press Secretary Karoline Leavitt said.

The end date of Musk’s employment at the government is up in the air, as the Tesla boss previously said he’d have wrapped up his task of cutting $1 trillion in federal spending by the end of his 130 days. That was thrown into doubt last month, however, when Musk told Fox Business Network’s “Kudlow” show that he thought he’d get another year working for the President.

Tesla takes all the headlines these days, but there are other electric vehicle startups in America just trying to make things work. Lucid and Rivian are two of the biggest, but they’re both facing wildly different fortunes if their latest delivery data is anything to go by.

In the first three months of the year, California-based Lucid saw deliveries rise while Rivian sales were on the way down, according to Reuters. Lucid’s sales jumped 58% after new incentives and financing deals were launched to woo Tesla buyers, while Rivian saw sales drop 36%, as Reuters explains:

Rivian has been battling tough demand as consumers opt for cheaper hybrid and gas-powered vehicles in an uncertain economic and political environment. Rivian CFO Claire McDonough had said in February vehicle deliveries would be lower this year due to soft demand, partially because of the impact of fires in Los Angeles.

The company delivered 8,640 vehicles in the three month period to the end of March, which was down on the 13,588 it sold a year earlier but up on estimates of just 8,200. Lucid, meanwhile, shipped 3,109 vehicles during the first quarter, compared with 1,967 that it managed during the same period last year.

Back in the day I was great at listening to new music, I subscribed to NME and Q Magazine to hear about all the latest bands coming up and would regularly run down to shows at The Harley and The Leadmill in Sheffield to try and see the next big thing. It was fun, but was an obsession that fell by the wayside over the years as I settled into the rhythm of listening to people I was, by then, very familiar with.

I’ve since gotten into a bit of a rut of the same ten artists on repeat with the odd new musician that breaks through into my Spotify top eight for a week or two. One of the breakout acts from the past few years was British duo Wet Leg, who are back with a new song that you should give a spin.