Automotive stocks across the United States witnessed notable gains on Monday as President Donald Trump signalled potential flexibility in his administration’s 25% tariffs on imported vehicles and components.
During discussions with Salvadoran President Nayib Bukele, Trump acknowledged the challenges faced by manufacturers transitioning supply chains to domestic production, stating he aims to “help some of the car companies” by granting them additional time to adjust.
“They need a little bit of time because they’re going to make them here,” he noted during the Oval Office meeting, though specifics about potential exemptions or timelines remained unclear.
Investors responded positively, pushing shares of Ford, General Motors (GM), and Stellantis—parent company of Chrysler—up by 4.5% to 5%, reversing earlier stagnation.
Smaller manufacturers also benefited, with Rivian Automotive closing 4.9% higher, while Tesla’s valuation held steady. Japanese automakers Toyota and Honda saw modest gains between 1.5% and 2%, alongside electric vehicle startup Lucid Group. A senior industry executive described the remarks as reflecting “some recognition that this is getting tough for the industry,” pertaining to the strain caused by tariffs imposed on April 3.
Despite recent tariff reductions for other sectors and exemptions granted to technology firms like Apple, automotive levies remain firmly in place. Manufacturers have adopted divergent strategies to mitigate the impact.
Ford and Stellantis introduced temporary employee pricing incentives for consumers, while Jaguar Land Rover suspended U.S. shipments entirely. Hyundai Motor opted to freeze price increases for at least two months to ease buyer concerns, and GM accelerated production at its Indiana truck plant while cancelling planned downtime at a Tennessee facility.
The Tennessee plant’s leadership confirmed the adjustments in a message to staff, stating, “The previously announced downtime for the week of 12th May is being rescinded, which means full production in Vehicle Assembly will run as normal.” A GM spokesperson later verified the changes, noting the facility produces several Cadillac crossover models.
Analysts warn the tariffs could inflate vehicle prices by roughly $5,000–$10,000, with research from the Center for Automotive Research suggesting U.S. automakers might face up to $108 billion in additional costs by 2025.
While Trump has urged consumers to prioritise American-made vehicles, data from Cox Automotive reveals most models sold domestically—including popular Honda and Chevrolet lines—rely heavily on foreign components, leaving them vulnerable to price hikes.