Trump's tariffs are a 'debacle of epic proportions' for the auto industry — and consumers too, analyst says

• Trump's auto tariffs are now live — and they're causing major disruption for manufacturers.

• Automakers are scrambling to react, with one analyst describing them as "a debacle of epic proportions."

• Another says Tesla is "well positioned" to handle the fallout and may benefit if rivals raise prices.

Automakers are facing major disruption as President Donald Trump's tariffs grip the industry.

Ford, Nissan, and Stellantis are all making major changes as they grapple with the levies, with one analyst describing the 25% tariffs on imported cars as a "debacle of epic proportions" for the industry.

"We believe the price impacts from this head-scratching tariff slate could result in demand destruction of 15%-20% in 2025 for new auto purchases alone based on our estimates," Wedbush Securities analyst Dan Ives wrote in a note on Sunday.

"The tariffs are a debacle of epic proportions for the auto industry and US consumers as the concept of a US-made car with all US parts is a fairy tale fictional narrative."

The disruption has continued as automakers have been hit hard by the market chaos surrounding Trump's reciprocal tariffs, with shares in Japanese and European carmakers falling again on Monday.

Nissan fell 9.3% and Toyota dropped 5.9% in Tokyo, while in Frankfurt Volkswagen dipped 4.6% in afternoon trading and Stellantis fell almost 6% in Milan. Stock in the Jeep and Citroën owner has sunk by more than a third this year.

The 25% levy on imported vehicles, which went into effect last week, is already sending shockwaves through the industry.

Nissan announced on Thursday that it would stop taking US orders for two Infiniti SUVs, which are made in Mexico, while Volkswagen said it would add an "import fee" to the prices of vehicles hit by the tariffs.

Jeep and RAM owner Stellantis confirmed on Thursday it had paused production at two factories in Mexico and Canada and furloughed 900 workers at factories in Michigan and Indiana as it navigates the tariff turmoil.

Some automakers are attempting to take advantage of the chaos. Ford announced last week it would extend employee pricing to all customers in an attempt to drive sales, while Stellantis followed suit on Friday.

Analysts and automakers have warned that the tariffs will hike already-high new car prices and erase profits, with S&P Global estimating more than 20% of new light vehicles sold in the US are built in Mexico and Canada.

Some manufacturers may fare better than others.

In a Sunday note, Stifel analyst Stephen Gengaro said that Tesla, Rivian, and Lucid are "well positioned" thanks to their US-based supply chains, adding that Tesla could even benefit if rivals of Elon Musk's company choose to raise prices because of tariffs.