What Trump’s auto tariffs mean for EV prices in 2026

If you’ve been shopping for a new car lately, you may have noticed that prices are moving. Some models have gotten more expensive in the past year, and others are on track to go higher. A big reason for that is the set of auto tariffs that the Trump administration put in place in 2025. Here’s what happened, which EVs are affected most, and what it means for you as a buyer.

What the tariffs actually are

In April 2025, President Trump signed a 25% tariff on all vehicles imported into the United States. That means any car built outside the country and shipped here for sale faces a 25% tax at the border before it even reaches a dealer.

There are also tariffs on auto parts. Any car built in North America that uses parts not sourced from the US, Canada, or Mexico faces a 25% tariff on those components. That raises the cost of building cars, even when final assembly occurs on American soil.

Vehicles from the European Union, Japan, and South Korea face a 15% tariff on imports. And cars made in China face tariffs of 100% or more, which effectively makes it impossible to sell a China-built vehicle in the US at a competitive price.

How much have prices gone up?

The tariffs have cost automakers more than $35 billion since they took effect. Some of those costs have been passed along to buyers, while others have been absorbed by companies to stay competitive.

Imported vehicles saw the biggest price increases, with some models rising by $5,000 to $8,900. Domestically built vehicles rose less, roughly $1,600 to $2,000, mostly because of higher costs for steel, aluminum, and imported parts. Overall, the average vehicle price rose about 10% in 2025. Cox Automotive expects prices to climb another 4% to 8% by the end of 2026 as more of the tariff costs work their way through supply chains.

As Ford has already shown with the F-150 Lightning, even American-made EVs aren’t completely immune. Higher parts costs still push prices up, even when final assembly stays in the US.

Which EVs are hit hardest

The EVs most affected by the tariffs are those built outside the United States. If a car rolls off an assembly line in Germany, South Korea, or Mexico and is then shipped here, the full import tariff applies.

Some popular models that face higher tariff pressure include EVs from brands like Volvo, BMW, Mercedes-Benz, and Audi, many of which still assemble certain models abroad. Korean-built versions of Hyundai and Kia EVs also carry higher tariff exposure, though both companies have been investing in US production to reduce that risk.

The Chevrolet Equinox EV, one of the most affordable EVs on the market, has also faced scrutiny because of its supply chain, which relies on parts and some production outside the US.

Which EVs are better protected

Cars built in the United States have a natural advantage under these tariffs. The tariff doesn’t apply to the import of the vehicle itself, and the parts tariff is easier to manage when supply chains are domestic or within the USMCA zone (the US, Canada, and Mexico).

Tesla builds all of its US vehicles in California and Texas. The Model Y, Model 3, Model S, and Model X are assembled at the Fremont, California, and Austin, Texas, plants. Rivian assembles its R1T and R1S in Normal, Illinois. Lucid builds the Air in Casa Grande, Arizona. Ford builds the F-150 Lightning in Dearborn, Michigan. These brands and models are in the best position to avoid the heaviest tariff impact.

Tesla has faced its own challenges in this environment, but its US manufacturing base gives it a structural advantage that most foreign brands cannot match at the moment.

Is there any good news?

One silver lining came from the One Big Beautiful Bill Act, which was signed in July 2025. While that law eliminated the federal EV purchase tax credit, it also created a new deduction for buyers of American-made vehicles. If the car you buy has final assembly in the US, you may be able to deduct a portion of the purchase price on your federal taxes. This benefit is separate from any EV-specific credit and applies to gas, hybrid, and electric vehicles alike, as long as they’re assembled domestically. For a full picture of what incentives are still available, see our breakdown of EV tax credits and incentives for 2026.

What this means for EV buyers right now

If you’re in the market for an EV, here are a few practical takeaways.

Check where the car is assembled. The Monroney sticker (the window sticker on every new car) lists the final assembly location. A US assembly point means you’re better protected from the import tariff and may qualify for the new American-made vehicle deduction.

Be cautious about waiting. If tariff costs continue to be passed through to retail prices, vehicles that seem expensive today may be even more expensive six months from now. Cox Automotive’s forecast of a 4% to 8% additional price increase in 2026 is worth taking seriously.

Hybrids built in the US remain a strong option. Toyota, Honda, and Ford all build popular hybrid models on American soil. With gas prices elevated and EV incentives reduced, a US-assembled hybrid from a domestic plant threads the needle on cost and fuel savings.

And if you’re open to buying used, the tariffs do not apply to pre-owned vehicles. Used EV prices have dropped sharply over the past year, which makes the used market an attractive alternative to navigating new-car price volatility.