Your Next Car Might Cost More: Industry Insiders Explain Tariff-Driven Price Increases and How to Offset Costs

These are not only iPhones and TVs. President Donald Trump’s pricing policies could also increase the cost of electric vehicles and combustion cars. Electric vehicles, in fact, could be particularly vulnerable to new prices that target China (a major exporter of critical metals) and the steel industry.

China already has a monopoly almost on critical minerals and rare land metals used to make cars, and these rates have given China reasons to use it as leverage in the United States. It is according to Anne Clawson, co-founder and head of political affairs and government affairs at Cascade Advisory, a consulting company specializing in manufacturing, clean energy and critical mineral policy.

“What is delicate is that each component will be affected a little differently,” said Clawson. “Prices are a major concern for affordability, but also for the availability of cars.”

Although it is still too early to know exactly how things will take place, we have asked industry experts like Clawson what you need to know about the potential impact of prices on electric vehicles in the United States.

Find out more: Cnet Daily Tariff Price Tracker: I look at 11 key products for changes, here is what happened

What Trump prices will electric vehicles allocate?

Prices are essentially taxes on goods that come to the United States from other countries. The series of new prices imposed by the Trump administration has a lot of potential to affect the automotive industry.

Trump issued a 25% rate on all cars and car parts made abroad and a 50% tariff on all steel imports, a major contribution to the manufacture of cars.

The new tariff position towards China, in particular, is also relevant here. After negotiations, the United States has set a 55% rate on Chinese products. China also uses its domination in this area as a lever effect, as the treatment and export of critical minerals and rare land metals are essential to build modern cars, said Clawson. China restricts the supply of certain rare land metals that enter cars, she said. But the latest reports show that China is reclaiming from these restrictions.

Electric vehicles depend in particular on these metals for battery components, but almost all cars are now using an amount to operate electronics or improving performance, Note Clawson. “You can’t really make a car without them,” she said.

How will Trump’s prices affect EV prices?

With higher prices and limited supplies of these critical components, there is a lot of pressure on the manufacturers of electric vehicles (and all vehicles, by the way).

Steel prices could have the greatest impact on automotive prices, due to the amount of material used to build a car, according to Joshua Ballard, CEO of the USA Rare Earth metal extraction company. Clawson adds that the steel market is mature enough for visible prices, giving automobile companies the possibility of limiting risks.

Meanwhile, rare metals and magnets are a relatively smaller (but no less essential) quantity of a combustion car, said Ballard. These materials are used to make steering columns, sensors and security systems. “You would be surprised where they appear. Electric vehicles, however, use more of these materials than conventional vehicles.

Regarding critical minerals, there is less price visibility. “It is very difficult for companies to isolate their risk,” said Clawson. Using lithium as an example, which is used to make batteries for electric vehicles, Clawson said that China had flooded the cheap lithium market that has flowed its price. As lithium has become cheaper, China has strengthened its grip on the market.

With so much uncertainty in pricing policy, Clawson says that many American and foreign car manufacturers do not know how to sail in this new landscape. Make decisions in response to prices is also difficult for multinationals, as they could be injured by certain prices but helped by others, she said.

Try as they can absorb certain cost increases, car manufacturers have only much margin to play before cars prices take place. “The consumer price will inevitably increase,” said Clawson. She predicts that there will be a lot of short -term instability, with the price level potential in 2027 car models.

Beyond prices, export prices and restrictions could also have an impact on the overall availability of cars, said Clawson.

Trump’s prices and electric vehicles: what’s going on?

The domination of China in the rare land metals has aroused more interest in mining and interior manufacturing for these materials.

“The pressure point has been built during the decades,” said Ballard, and now he comes to the head.

Ballard claims that his business is one of those who try to build a mining supply chain and American manufacturing for minerals and essential magnets used in electric vehicles and many other electronics. The controls in the course of tariff and export dispute have only accelerated the effort.

Over time, the increase in the amount of metals and magnets available at the national level could reduce dependence on foreign imports and potentially reduce costs – or at least help avoid prices.

Car manufacturers could also start making decisions to reduce their exposure to prices by moving suppliers or facilities, says Clawson. She notes that some companies have already done so in response to prices during the first Trump presidency, and that this could happen if these new prices remain high.

What does this mean for you?

In the end: Expect to pay more if you are on the market for a car in the foreseeable future. Kelly Blue Book estimates an average increase of $ 6,000 for vehicles under $ 40,000. However, not all models will be affected – for example, Mazda recently announced that vehicles already in dealership stocks “will not be affected by these new prices”. Shopping smarter with an eye on vehicles least affected by prices could save you a few dollars.

The $ 7,500 tax credit on eligible electric vehicles ends on September 30, 2025 as part of Trump’s major bill. If you want to take advantage of the tax credit before its expiration, you can find an EV list eligible here.

CNET automotive expert, Antuan Goodwin, advises that buyers could also consider reducing their new car ambitions. Perhaps looking for an intermediate level which only has the features you need, rather than obtaining the upper level model with all the bells and the whistles. The list of electric and most affordable electric vehicles of CNET is a good place to start your search, but if you feel the pinch, consider more close to hybrid or combustion alternatives. You can even add low mileage pre-games cars to your search or consider rental as an alternative to the purchase of news.

“However, a rising tide increases all ships,” said Goodwin. “A expects that the cost of used cars also increases to compensate for increased demand, as we have seen during the Pandemic Covid-19 supply chain shortages. In addition, as cars and their parts become more expensive, expect taxes and interest on funding, as well as insurance and other property costs to also increase this in your budget.”