Trump Auto Tariffs Could Up Car Prices By $15K, Analyst Calls It 'Pure Chaos'

The U.S. auto industry just took a direct hit from what Wedbush analyst Dan Ives calls a "tariff torpedo."

President Donald Trump's sweeping 25% tariffs on imported cars and auto parts threaten to send vehicle prices soaring and disrupt supply chains for years to come.

A Black Swan Event For Automakers

Tariffs present a "debacle of epic proportions," Ives says. Expect demand destruction of 15% to 20% for new car purchases in 2025.

According to his estimates, the tariffs will immediately raise the price of a typical vehicle by $5,000 to $10,000, with some higher-end models seeing increases of up to $15,000.

Ferrari NV (NYSE:RACE) has already signaled price hikes after April 1. Ives warns that "every automaker in the world will have to raise prices in some form" as the industry scrambles to absorb the shock.

Even U.S. manufacturers, who produce cars domestically, still rely on 40%-50% of parts sourced from abroad. The idea of an all-American-made car, Ives argues, is "a fairy tale fictional narrative."

Read Also: Trump’s ‘Reign Of Tariffs’ Unleashes ‘D-Day On Wall Street,’ Analyst Warns Of Stagflation Risk

The Supply Chain Nightmare

With global automakers locked into supplier contracts years in advance, the ripple effects of the tariffs could be catastrophic.

"The rules of the U.S. tariff game are untenable," Ives says. Shifting just 10% of the supply chain to the U.S. would take at least three years and cost hundreds of billions of dollars.

The impact? “Pure chaos" across the industry, with costs expected to balloon by $100 billion annually and get passed directly onto consumers.

Tesla Inc (NASDAQ:TSLA), often seen as an exception due to its U.S.-based production, isn't immune either. Despite its domestic footprint, Ives warns that even Elon Musk's EV giant "will be forced to raise prices" under the new tariff regime.

No Winners In This Trade War

"This 25% auto tariff number is hard to digest," Ives laments, predicting continued downward pressure on General Motors Co (NYSE:GM), Ford Motor Co (NYSE:F), and global auto suppliers unless negotiations soften the blow. "The winner in our view from this tariff is NO ONE."

As automakers and consumers brace for impact, the industry finds itself in "pure panic mode," facing a stark reality: higher prices, shrinking demand, and what Ives describes as nothing short of "Armageddon" for the global auto market.

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