Automotive stocks holding despite upcoming tariffs

It’s the Monday morning before Trump’s tariffs are set to take effect, and one of the industries that will be hit the hardest is — of course — automotive. However, if you take a look at the current state of some of the biggest automotive stocks that will be affected by these taxes, it doesn’t seem like the price reflects how bad it will get.

In premarket trading, General Motors (GM) is currently down $3.64 at $45.82. Ford (F) is at $9.64, which is down 44 cents pre-market. Stellantis (STLA), which also announced some management changes this morning, is down 68 cents in pre-market trading at $12.45. Magna International (MGA) is down $2.17 in pre-market trading at $37.50.

Each of these companies (Magna is a Tier 1 supplier with U.S. headquarters in Toronto) has some of the most exposure to Trump’s upcoming trade war. Analysts are unsure how long it’ll take for inflated pricing to hit cars on dealership lots, but early estimates anticipate a $3,000 cost increase for each car on the lot.

It’s somewhat unknown how long it’ll take to hit car prices because automakers are sitting on inventories of unsold vehicles. Especially in EVs, which sit a bit longer before being sold than gasoline-powered cars, it could take some time for the supply chain to catch up to the tariffs. It is also possible, however, that the price changes implemented immediately since OEMs will be hit with the higher taxes on day one and already operate on fairly slim margins.