Automakers brace for new tariffs, EV changes under Trump presidency (updated)

LG

06/11/2024 23:22

* 
      President-elect has said he will rescind EPA,
Transportation
Department rules
    

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      Trump has warned of tariffs of 200% or more on vehicles
imported
from Mexico
    

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      Honda would think about shifting production away from
Mexico if
tariffs permanent -executive
    

  
 (Adds details from automakers, more comments)
    By David Shepardson, Norihiko Shirouzu and Ben Klayman
       WASHINGTON, Nov 6 (Reuters) - Automakers are bracing for
President-elect Donald Trump to impose new tariffs on vehicles
from Mexico and potentially from other countries and to reverse
many existing pro-electric vehicle policies, industry
associations and executives said. 
    Trump has said he plans to begin rescinding Environmental
Protection Agency and Transportation Department vehicle rules on
his first day in office and is considering paring back or
eliminating EV tax breaks and other incentives.
    Those regulatory changes could give automakers more
flexibility to build more profitable gas-powered SUVs and trucks
but raise questions about the future of billions of dollars in
EV battery and manufacturing spending.
    The Zero Emission Transportation Association, which includes
Tesla  TSLA.O , Rivian  RIVN.O , Lucid  LCID.O  and battery
maker LG  003550.KS , said on Wednesday it was ready to work
with Trump. The "next four years are critical to ensuring that
these technologies are developed and deployed by American
workers in American factories for generations," it added.
    Tesla shares closed nearly 15% higher on Wednesday as
investors bet it stood to benefit from its CEO Elon Musk's close
ties with Trump.
    The American Trucking Associations on Wednesday called on
Trump to replace the EPA's tighter tailpipe emissions with
national emission standards that were "technologically
achievable and account for the operational realities of our
essential industry."
    Trump plans to rescind California's ability to set its own
vehicle emissions rules, as he did in 2019. President Joe Biden
reinstated California's authority. Trump will also decide how to
spend billions of dollars in EV charging grants. 
    Trump has repeatedly warned he will impose tariffs of 200%
or more on vehicles imported from Mexico and could also impose
them on Asian and European vehicles.
    Trump wants to prevent Chinese auto imports, but is open to
Chinese automakers building vehicles in the United States.
    "We're going to give incentives, and if China and other
countries want to come here and sell the cars, they're going to
build plants here, and they're going to hire our workers," Trump
told Reuters in August.
    Mark Williams, president of site selection firm Strategic
Development Group, expects to see greater demand for his
company, but said tariffs will likely result in higher costs.
    "If you're going to cut China out of our manufacturing
system of pieces and parts that feed into automakers and you
don't have a Mexico or somewhere else, I just don't know how
much of it you can do in the U.S.," he said. "I think we need
Mexico more than ever if China is getting cut off."
    South Korea's trade minister said Wednesday he expected
companies from his country to invest more in the United States
if Trump imposes higher tariffs.
    Honda's  7267.T  production capacity in Mexico is about
200,000 vehicles annually and 80% are exported to the U.S.
market, chief operating officer Shinji Aoyama said.
    If the U.S. were to impose permanent tariffs on vehicles
imported from Mexico, Aoyama said Honda would have to think
about shifting production.
    Toyota  7203.T  builds Tacoma trucks at two plants in Mexico
and sold more than 230,000 of the model in the United States
last year.
    A person close to Toyota said steep tariffs by Trump on
Mexican imports could prompt the automaker to move production of
a vehicle like the Tacoma to San Antonio, Texas. A Toyota
spokesperson declined to comment.

 (Reporting by David Shepardson, Ben Klayman, Nora Eckert and
Norihiko Shirouzu; Editing by Jamie Freed)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))