Impact of tariffs on electric vehicles

Since the beginning of 2025, and especially since the month of February, there has been a flurry of announcements concerning the tariffs that U.S. President Donald Trump wishes to impose on products from other countries destined to enter the U.S. market. A veritable tariff war has been launched. In the automotive sector, it is having catastrophic consequences, the effects of which are only just beginning to be felt. If the 25% tariffs imposed on vehicles entering the U.S., and on many of the parts that make them up, remain in place, there will be a bloodbath in the medium and long term. Because of the counter-tariffs lifted by Canada, consumers here will also find themselves impacted. So we wondered: what impact will tariffs have on electric vehicles?

Customs tariffs: uncertainty prevails

It’s still hard to know how vehicle prices will be affected, as it’s likely a case-by-case process due to the number of « foreign » parts that go into them. Certain parts that meet the standards of the Canada-U.S.-Mexico Agreement (CUMA) are exempt, for example. Some commercial concessions under the CUMA lower the rate to 12.5% for eligible vehicles. Even so, the impact on Canadian automotive brands and supply chains is inevitable.

What is certain is that vehicle prices will rise in North America. In the US, industry analysts predict bills will increase from US $3,000 to US $20,000 per model, depending on the product. It is not good news for consumers.

To try and get an idea of which models will be most or least affected by the tariffs, let’s take a look at 10 vehicles with the most parts from Canada and the USA, as reported by Insideevs in an in-depth analysis of the tariff issue. Here, then, is the impact of tariffs on 10 electric vehicles.

10 electric vehicles impacted

Tesla model will be the least affected by tariffs. The vehicles they sell on American soil are built in the USA. Nonetheless, its cars are not 100 % made up of American or Canadian parts. They are, however, in the following percentages by model.

• Model 3 : 75 %
• Model Y : 70 %
• Model S : 65 %
• Cybertruck : 65 %
• Model X : 60 %

Next up is the Acura ZDX, the only electric model in Honda’s luxury brand lineup. 63% of its components are sourced in Canada and the USA, and 19% are also from Mexico, making it an 82% North American vehicle. Acura assembles its ZDX in the USA.

Next in line is the Dodge Charger Daytona, built in Canada. Although 51% of its components come from Canada and our immediate neighbors, the car is made in our country, which penalizes it from the outset.

The next model on the list is the Honda Prologue, with 38% of its parts coming from Canada or the USA. The Jeep Wagoneer S follows it. The former is assembled in Mexico, while the latter is made in the USA.

It should be noted that some companies were unable to provide information concerning the provenance of their parts so their models could appear on our list. This is the case for Cadillac’s Lyriq and Optiq SUVs and the American products of Lucid Motors and Rivian. You can guess that they have a high percentage of North American parts.

THE TARIFF PUZZLE

As we mentioned earlier, it’s not easy to make sense of all this, and since some parts are affected while others are not, it’s a real headache.

At Morgan Stanley,  they predicts that the price of new vehicles will rise by 11% to 12%, regardless of where they are manufactured. What’s important to understand is that automakers won’t just be raising the price of the models affected by the tariffs; they’ll be spreading the cost across their range so that the impact isn’t too penalizing for some models in particular, to the detriment of others. It is estimated that vehicle sales could fall by 15% to 20% over the next year, with horrendous consequences for jobs everywhere.

No one will come out a winner from the tariff war launched by Donald Trump. We’ll be keeping a close eye on the situation, and will keep you posted as things develop. In the meantime, are you considering a foreign electric vehicle?