☰
Wedbush warned that if the tariffs remain in their current form, they would act as a "hurricane-like headwind" and push the average price of cars by $5,000 to $10,000.
Shares of Detroit's 'Big Three' automakers sank in Wednesday's extended trading hours after President Donald Trump unveiled the long-awaited slate of tariffs on foreign-made cars through an executive order. Retail investors’ mood also turned somber.
Starting April 2, the U.S. government will impose a 25% tariff on imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans), light trucks, and key auto parts such as engines, transmissions, powertrain components, and electrical systems. If needed, more parts may be added later.
Automakers importing vehicles under the United States-Mexico-Canada Agreement (USMCA) can certify their U.S. content, ensuring the tariff applies only to the non-U.S. portion.
"We're going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they've been taking over the years," Trump reportedly said on Wednesday.
Shares of Ford fell over 4.7%, while Stellantis took a 4.1% hit, and General Motors led the slide with a nearly 6.2% fall after the closing bell.
On Stocktwits, sentiment for Ford remained 'neutral,' while it flipped to 'extremely bearish' for GM and Stellantis.
One retail watcher believed tariffs were already factored in and had expected the stock to drop more. "Will continue to hold my 8600 [Ford] shares and collect the [dividend]," they added.
However, fear appeared to loom larger. One user voiced concerns over Trump's "hardline" stance on U.S. auto manufacturing, arguing that abrupt changes like this could make cars unaffordable for Americans.
In a note to clients late Wednesday, Wedbush analysts led by Daniel Ives addressed the "big confusion" among investors over whether the tariffs would apply to finished cars or auto parts.
"We continue to believe this will ultimately be finished cars, which is less onerous for GM and Ford," the analysts said, adding that Tesla would be less exposed since its production and assembly are entirely U.S.-based.
According to a November report from Barclays, Stellantis manufactures 39% of its North American vehicles in Mexico or Canada, while General Motors produces 36% there, and Ford Motor makes 18% outside the U.S.
Wedbush warned that if the tariffs remain in their current form, they would act as a "hurricane-like headwind" for both foreign and some U.S. automakers, potentially driving up the average price of cars by $5,000 to $10,000.
However, the research firm believes this is still part of the negotiation process and expects further adjustments this week.
Year to date, shares of Ford are up nearly 4%, while GM is down more than 4% and Stellantis has shed over 7%.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.