Trump’s Planned Assault On Mexican Imports Will Screw Over America's Auto Industry

Good morning! It’s Tuesday, November 12, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

It’s been a week since convicted felon Donald Trump triumphed in the U.S. election, winning the 312 electoral college votes that paved the way for his return to the White House in 2025. The win has so far proven lucrative for Tesla and shown that there’s little standing in the way of Trump from enacting his vision for the U.S.

That vision for the country includes closing off its borders and implementing high tariffs on all kinds of goods being imported into the U.S., which may have a pretty dire impact on the American auto industry. In the days leading up to the election, Trump touted a 200 percent tariff on cars imported into the U.S. from Mexico and pledged to tighten up imports from China as well, which has worried experts across the auto industry and left some warning Business Insider that the sector could be thrown “into crisis.”

The sky-high tariffs on Mexican imports has already thrown the future of a $10 billion Tesla plant south of the border into doubt, and could mean higher prices on popular models that are already built there, like the Honda CR-V and Toyota Tacoma pickup truck. Now experts have warned that it “doesn’t make sense” to invest in Mexico ahead of a second Trump presidency:

Trump vowed to clamp down on automakers building cars in Mexico on the campaign trail, and the prospect of new tariffs could force US automakers such as Tesla to make some hard choices about operational or planned factories in Mexico.

Investment bank UBS warned that any tariffs on Mexico would be “highly disruptive” to the entire US automotive industry, in an analyst note released after the election. Analysts told BI that the tariffs floated by Trump would deter automakers such as Tesla from investing in Mexico.

“Everything’s up in the air with Tesla’s plant,” said Sam Fiorani of AutoForecast Solutions. “Depending on the level of the tariffs, it could complicate the investment in Mexico.”

It’s not just a new Tesla plant that’s being threatened by the 200 percent tariff, Detroit’s Big Three could also take a hit as a result of the measures as they all rely on cheap parts and labor in Mexico to produce some cars for U.S. customers.

The Ford Maverick is assembled south of the border and around a third of the pickups produced by GM and Stellantis come from Mexico. What’s more, components for the Mustang Mach-E EV come from Mexico and Nissan and VW both rely on factories in Mexico for U.S. inventories. All this means that the “difficulties” of Trump’s tariffs could be unavoidable:

“Imposing tariffs would be a deterrent. It would make it difficult if you’re planning on exporting to the US,” Stephanie Brinley, an automotive analyst at S&P Global, told BI.

She added: “It makes building a plant in Mexico more expensive and less attractive.

Brinley added that many automakers with a significant US presence had been established in Mexico for decades, meaning it would cost billions and be highly difficult to shift production to the US or other markets in response to tariffs.

Now, we’ll just have to sit and wait to see what Trump’s plans for Mexican imports will really look like once he takes office in the new year. With Tesla boss Elon Musk whispering in his ear at every turn, there’s a good chance that any measures could hit Tesla’s rivals harder than the Musk-owned automaker.

Chinese automaker BYD has been on a roll this year, surpassing Tesla in revenue just last month and repeatedly challenging the EV maker for the crown of world’s biggest electric vehicle seller. Now, not content with scrapping with Tesla all year, the Chinese company is eyeing up industry stalwart Ford and could soon surpass the Blue Oval’s sales.

According to its latest sales figures, BYD shipped more than half a million cars around the world in October after strong demand for plug-in hybrid models further boosted its sales, reports Bloomberg. The company’s record sales mean that it’s now on a par with Ford, which has more than 90 years more experience selling cars than BYD:

The extraordinary sales volumes being pumped out by China’s best-selling car brand means BYD has a shot at beating Ford Motor Co. in annual shipments this year, a milestone that would cement its position as a top 10 automaker globally.

BYD kicked off the December quarter by selling a record half a million vehicles in October. That impressive number put it nearly on par with Ford year-to-date, and almost all analysts covering BYD expect the momentum to continue. The US automaker, which only reports global sales on a quarterly basis, has been averaging around 1.1 million vehicles a quarter.

“Getting to 4 million is a stunning milestone,” auto industry consultant Michael Dunne said, referring to BYD’s reported annual target. “BYD will soon be seeing Ford in the rear-view mirror.”

If BYD hits its target of 4 million cars sold in 2024 and surpasses Ford, it will make it the third best-selling automaker in the world. The only companies ahead of it in terms of global sales will be Volkswagen, which shifted 5 million cars in 2023, and Toyota, which sold double that figure.

The company’s meteoric rise through the ranks in recent years has been bolstered by strong demand for its plug-in hybrid models in China and interest in its budget-friendly electric models around the world. The sky-high sales growth has come despite the constant threat of additional tariffs from places like Europe, in which BYD is wiping the floor with legacy automakers and their feeble attempts to electrify their ranges.

Another week, another probe into safety concerns hitting a ridiculously large number of cars sold across America. This time, it’s Honda that’s facing an investigation into more than 1.4 million cars over engine issues that could impact certain models.

The National Highway Traffic Safety Administration has opened a probe into 1.4 million Hondas that it says could suffer from “serious engine issues” that could lead to a total failure of the car’s motor, reports Reuters. The probe will hit cars such as the Acura MDX, Honda Pilot and Honda Odyssey:

Honda in November 2023 recalled 249,000 vehicles in the United States with a 3.5 liter V6 engine after the Japanese automaker said a manufacturing defect in the engine crankshaft could cause the connecting rod bearing to prematurely wear and seize, leading to engine failure.

The U.S. auto safety agency said it has 173 reports of the issue in various Honda and Acura vehicles from the 2016-2020 model years. NHTSA’s probe is to determine the severity of the issue and to determine if the vehicles not included in the 2023 recall should be covered.

Honda said Monday it was aware of the probe and “has already been in communication with the agency on this topic and will continue to cooperate with the NHTSA through the query process.”

The Japanese automaker first uncovered the issue back in 2020 and launched an investigation of its own into the defect before announcing a recall last year. Now, the NHTSA says it has received reports of defects with some Honda’s that were “consistent” with the issues found in the recall, but not covered by the measures.

As such, a probe has been launched into the 2016-2020 Acura MDX, 2018-2020 Acura TLX, 2016-2020 Honda Pilot, 2017-2019 Honda Ridgeline and 2018-2020 Honda Odyssey.

If you are worried that your car might be affected by a recall or investigation like this, there are a few easy ways to check if it’s the case. First up, the NHTSA has a super handy app that you can use to see if your vehicle is impacted by a recall, or you can head to the regulator’s website and plug your VIN into its recall search tool.

As is tradition with The Morning Shift, we now have to talk about the dire state of Stellantis in 2024. After revealing that its CEO was leaving, that almost every dealer in the U.S. was pissed with the automaker and that layoffs were hitting its truck production, Stellantis has now announced another round of layoffs are coming.

After cutting jobs at the facility that produces its Jeep Gladiator truck last week, Stellantis has now announced that 400 further jobs will be cut from its U.S. workforce, reports the Detroit Free Press. This new round of layoffs will hit Detroit and workers at the automaker’s logistics facility:

Stellantis added to its rising tally of layoffs on Friday, saying 400 workers at a Detroit logistics facility would indefinitely lose their jobs as the carmaker reduces costs in its struggling North American business.

“As Stellantis navigates a transitional year, the focus is on realigning its U.S. operations to ensure a strong start to 2025,” the company said in a statement. The statement said the company “will transition the Freud Street sequencing facility to a third-party service provider.” The materials logistics facility supports Mack and Jefferson assembly plants.

The automaker on Wednesday laid off about 1,100 employees at a Jeep Gladiator plant in Ohio, and in August cut as many as 2,450 unionized jobs at its Warren Truck facility as it ended production of the Ram 1500 Classic truck.

Stellantis’ emphasis on cost-cutting has intensified as CEO Carlos Tavares tries to reverse its sliding sales and profits in the U.S.

Stellantis isn’t the only automaker looking to dramatically cut costs, as EV makers Rivian and Lucid this week revealed that dramatic cuts were coming to both companies in the coming months. However, the situation at Stellantis somehow feels even more dire than the EV startups, with calls coming for the company to sell off its brands and even Italian lawmakers questioning the automaker’s methods.

On November 12, 1799, Andrew Ellicott, an early American astronomer, witnesses the Leonids meteor…