"A Fluid Situation": Deutsche Bank On How Auto OEM's Are Responding To Tariffs

Deutsche Bank's latest note analyzes automakers' responses to new tariffs. Automakers are employing diverse strategies including price adjustments and production changes. The situation is dynamic, with potential tariff suspensions under consideration. However, Deutsche Bank advises assuming a 25% tariff on all imported vehicles and parts. Reactions vary widely; some companies absorb costs, others pass them on. Ford is offering discounts and production shifts, while Honda won't raise prices. Tesla paused China sales of some models, and GM halted plant operations. The impact is significant, with cost increases expected across the industry. Deutsche Bank continuously monitors developments and provides updated data. Ford and GM face substantial cost increases, potentially impacting their earnings significantly. Rivian's comparatively smaller exposure is highlighted as a positive. Tesla's long-term prospects are viewed favorably despite short-term challenges.