The threat of auto tariffs on vehicles built in Mexico and Canada hasn’t gone away, and experts expect it to hit consumer wallets hard as soon as April. President Donald Trump said Monday that auto-industry tariffs will be announced “fairly soon,” with reciprocal tariffs set for April 2, according to a report. The U.S. imported $471 billion in automotive products in 2024, including $214 billion in passenger cars. That’s a lot of metal crossing the border, and a lot of it carries battery power.
Mexico builds hundreds of thousands of U.S.-bound vehicles every year, many of them affordable entry-level models. But the country itself buys almost no EVs. Out of nearly 1.1 million new cars sold in Mexico, electric vehicles make up a tiny slice. A lack of charging infrastructure and high prices are the main reasons.
Automakers have warned that a tariff on Mexico and Canada would trigger immediate price hikes. Some models might even disappear from the U.S. market. Wells Fargo estimated last December that a 25% tariff on parts from both countries could add roughly $2,100 to the cost of a U.S.-assembled vehicle. For models built in Canada or Mexico, the hit could be $8,000 to $10,000 per car.
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GM is particularly exposed. The automaker assembled more than 889,000 vehicles in Mexico last year, and shipped about 653,000 of them to the U.S. That includes both profitable full-size trucks and various EVs. If tariffs hit, GM’s margins could take a serious blow.
The EVs and plug-ins actually built in Mexico and Canada
The federal government’s American Automobile Labeling Act (AALA) list, published annually, shows which vehicles are assembled in those two countries. Not every model on the list is a pure EV. Some are plug-in hybrids, but they still qualify for certain federal incentives.
- Audi Q5 S line 55 e (plug-in hybrid) — built in Mexico
- Chrysler Pacifica Hybrid (plug-in hybrid) — built in Canada
- Toyota RAV4 Prime (plug-in hybrid) — built in Canada
A quick note: the list doesn’t include every EV or plug-in sold in the U.S., only those that meet the labeling act’s assembly reporting requirements. Some popular models — like the Ford Mustang Mach-E (Mexico) — may appear under different model-year designations. The three above are the ones clearly flagged for 2024.
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Tax credits hang in the balance
Under the Biden-era Inflation Reduction Act, a federal tax credit of up to $7,500 still applies to EVs and plug-in hybrids assembled in North America, including Mexico and Canada. That tax credit requires compliance with sourcing rules tied to the United States-Mexico-Canada Agreement (USMCA), which itself grew out of NAFTA. Trump has separately indicated he wants to eliminate the EV tax credit entirely. A research group recently argued that doing so would devastate U.S. manufacturing.
That puts models like the Audi Q5 plug-in or the Pacifica Hybrid in a strange spot. They’re eligible now. But if tariffs come first and the tax credit disappears, their prices could swing wildly — and their sales might tank.
Mexico’s own EV ambitions
Despite buying few EVs today, Mexico is trying to build its own supply chain. The government has announced plans for a federally subsidized EV that could cost as little as $4,400. That’s a radical contrast to most EVs on the U.S. market, which still hover above $40,000. Whether that tiny car ever makes it north is unclear, but it signals Mexico’s desire to stop being just an assembly hub.
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Right now, the country’s charging network remains minimal. Affordability is still the bigger barrier. Most Mexican households don’t have the income to spend on a new EV, even with subsidies. So the cars built there keep heading north.
Canadian production is smaller but not trivial. The Chrysler Pacifica Hybrid and Toyota RAV4 Prime both come from Ontario plants. Those models also face tariff risk, and their buyers — families looking for plug-in minivans or compact SUVs — could see prices jump thousands of dollars overnight.
Automakers haven’t publicly modeled what they’d do if a 25% tariff lands. But Wells Fargo’s estimate suggests the pain would be spread unevenly. U.S.-assembled vehicles get a smaller price bump; Mexican and Canadian imports get hammered. Some companies might absorb part of that cost. Most won’t.
