Cars prices could increase by $ 12,000 under new prices with electric vehicles taking the greatest success

The cross -border production is about to die soon, and a new study says that it will increase prices on the new cars market

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If you are thinking of buying a new car, you may want to press a break and consider a few things first. A new study by Anderson Economics Group (AEG) warns that prices should soar due to the 25% price of Donald Trump on imports from Mexico and Canada, which is confirmed to take effect on March 4. And although this is alone for your wallet.

Read: Stellantis Chef opposes Trump prices, suggests another way

The group based its conclusions on the prices offered of 25% against Mexico and Canada and a tariff of 10% against China. Using these figures, he predicts that even small crossroads will see at least a price increase of $ 4,000. Large SUVs with “important content” of Mexico would increase by about $ 9,000 and trucks would see a similar bump.

Electric vehicles: the biggest losers

Electric vehicles will be most affected by the hardest. AEG thinks they will see an increase of $ 12,000 on average. Combine this with the potential death of EV subsidies and this market could stall for a while. “This type of cost increase will lead directly – and I expect almost immediately – a drop in sales of models that have the biggest commercial impacts,” said Patrick Anderson, Managing Director of Anderson Economic Group, said Bloomberg. “You will see models and types of garnishes disappear,” he said.

So why are electric vehicles harder than your standard gas guzzler? It’s all about materials. “All manufacturers of electric vehicles will feel the pressure of those (prices) because they use much more steel and aluminum than a conventional combustion engine car,” said Marc Busch, professor of international commercial diplomacy at the University of Georgetown CNBC. “So I have no doubt that it will draw attention (musks), and I can imagine that it would be an advantage of additional political pressure in terms of reprisals by the European Union, Canada and others.”

Now Tesla’s situation is interesting. They build their American vehicles in Fremont, California and Austin, Texas, but the parts? Many come from China, Canada and Mexico. For example, 15% of the components of the model come from Mexico. They are already rushing to avoid an increase in the 25% rate on Chinese graphite, a key material for lithium-ion batteries.

It should be noted that the three main American car manufacturers produce vehicles in Mexico, Canada, or both. Ford makes the Mustang Mach-E, Bronco Sport and Maverick in Mexico. RAM trucks are built in Mexico and the United States, while Silverado de GM is the product of the three nations involved.

Car manufacturers are already making movements

In the meantime, car manufacturers do what they can to counter potential prices. Some have suppliers to accumulate stocks. Others store parts in strategic places to avoid being hit with the prices. It is clear that the automotive industry did not expect this and does not know how to plan.

A union representative said Bloomberg This Ford is “a racing product above the border of the United States-Canada in anticipation of prices”. In addition, it guarantees the storage of warehouses so that it can keep all these secure and sheltered parts of potential prices.

“We generally store them here (Ontariot, Canada) until we are ready to send to truck factories,” said Agnolo. “But they find places in the United States to store these engines so that they are not prices.”

Tick-Tock: Prices should strike on March 4

With the prices that should come into force on March 4, it seems that it remains shortly to avoid the impact. Politico reported that Trump told journalists in the White House earlier during the day: “There is no more room for Mexico or Canada” to negotiate. “They are all ready. They come into force tomorrow.