President Trump’s automotive tariffs have been in place for a month, and altered automotive parts tariffs are set to come into force on the 3rd of May. After years of low tariffs these most recent tariffs will have a wide-ranging effect across the EV industry.

How reliant is the US on EV imports?

In 2024, just over 1.5 million EVs were sold in the US market. Of these, 595,000 EVs were imported equating to 38% of all US EV sales in 2024. These vehicles originated from 14 countries, with Mexico accounting for the highest number followed by Japan and South Korea.

Canada and Mexico will feel the tariffs, but have some leniency

Under Trump’s tariff polices USMCA compliant vehicles are not subject tariffs, however the proportions of vehicles that are not USMCA compliant will be subject to the 25% automobile tariffs.

While some vehicles manufactured in Canada and Mexico meet USMCA requirements, many do not, largely due to the globally integrated nature of EV supply chains. As a result, a significant number of vehicles originating from these countries will still be subject to tariffs, albeit at slightly lower rates compared to other countries.

Europe will feel biggest impact of automotive tariffs

EVs from Europe made up 28% of US EV imports in 2024, indicating that the region stands to lose the most from the incoming automotive tariffs. Not far behind, Japan and South Korea accounted for 23% and 20% of US imports, respectively. Automakers exporting from these regions now face the prospect of shrinking profit margins or, in some cases, selling EVs at a loss.

Where do US EV exports go?

In 2024, the US produced just over 1.1 million EVs, while the majority of these went to the domestic market, just under 186,000 EVs, 17%, were exported and sold outside of the country. Most of these vehicles, 57%, remained within North America going to the US’ neighbours Canada and Mexico. Outside of the region, US-made EVs had a limited market share. The next biggest destination was Europe which sold just over 60,000 US made EVs in 2024.

US EV exports remain small, largely due to the fact that US automakers have established production facilities abroad, producing vehicles in target markets.

The outlook for the EV industry with US tariffs

Tariffs are set to push up EV prices in the US, as many automakers will pass the cost increases onto consumes. However, some automakers could pass the cost increases caused by the US tariffs onto consumers globally, in a bid to reduce US EV price increases.

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