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With consumer prices stable for now, auto turmoil continues
Tariff pressures and the end of EV subsidies shape the new RFP season
Traditionally, automotive request for proposal (RFP) season is an opportunity to seek new vendors and relationships that will boost growth and efficiency. This year, automotive suppliers will be hyper-focused on savings to offset unplanned tariff costs.
The automotive RFP season typically starts in the fourth quarter and extends into the first months of the new year. Off-cycle RFPs can occur when new projects or industry trend changes necessitate them.
One key challenge this year, beside tariff pressures, is the end of subsidies up to $7,500 for electric vehicle (EV) purchases on September 30, 2025. Several car makers had already pulled back on EV production, canceling models and shifting emphasis back to internal combustion engine vehicles. The changing model mix, too, will shape the upcoming RFP season.
Automotive shippers will need to put extra effort into finding their preferred logistics provider this year. Key factors to consider as you select your supply chain partner:
- Because the overall number of registered carriers is down 7% since September 2023, logistics providers can be more selective in their choice of clients, often looking for those that meet “favored shipper” status.
- Given the growth of automotive imports from Mexico, logistics providers that specialize in customs, eliminating language barriers, advanced security measures, bonded warehousing, and efficient border crossings will provide the most value.
- Because of the automotive industry’s broad global supply chain logistics providers that have a global reach and cover all modes of transportation throughout the supply chain will offer the greatest flexibility, efficiencies, and cost savings.
Consolidating automotive freight in Mexico and optimizing delivery into the United States and Canada with the C.H. Robinson cross-border freight consolidation program could deliver savings up to 40% and visibility to freight up to 48 hours earlier.
New tariffs on heavy-duty truck imports
The United States announced a new 25% tariff on heavy-duty truck imports, effective October 1, 2025, adding to the number of complications original equipment manufacturers (OEMs) are navigating. OEMs, actively managing existing tariffs on steel and aluminum, are struggling to calculate the amount of material that will be impacted by those tariffs and have been doing their best to mitigate cost impacts. Efforts to diversify sourcing have been challenging amid shifting trade policies. Additionally, there is still uncertainty as to whether these new heavy-duty truck tariffs will carry a USMCA exemption and whether there will be changes to the final ruling on the EPA’s 2027 emission standards. This comes as Class 8 truck sales are down 12% year-over-year and orders are down 5% due to the struggling freight market.
Dealers have mentioned negotiating with OEMs on who will absorb tariff costs, but with a soft freight market and ample truck supply, OEMs have limited ability to pass costs to buyers. Higher truck and parts costs could lead carriers to delay new purchases, increasing maintenance expenses and eventually raising barriers to entry. Over time, this could reduce capacity and increase operating costs that have already risen at a significant rate over the last 5 years.
Consumers not feeling tariff costs—yet
The estimated overall tariff hit to the auto industry this year is estimated at $10 billion. But this added cost has not yet been passed on to American car buyers. Earlier this year, auto prices were predicted to increase by the fall due to tariffs, but from mid-March to mid-August, they only rose by 1%.
As new 2026 models started rolling out in August, the average price increase is 3.3% over model year 2025. This is in line with historical averages, and nowhere near the price required to offset tariffs.
The big question for the industry is how long automakers will be able to absorb these costs. Manufacturers are working with their suppliers to share the burden and keep prices competitive. But if tariffs stick, long-term and industry-wide price adjustments will be inevitable.
Latest tariff updates impacting the auto industry
- On September 8, 2025, an updated list of exemptions to the reciprocal tariffs went into effect. Shippers are advised to determine if their products were added or subtracted to this new list.
- In September, the Secretary of Commerce announced new Section 232 investigations, including one seeking to “determine the effects on the national security of imports on robotics and industrial machinery.” OEMs and automotive suppliers are advised to monitor the progress of this investigation, as “robotics and industrial machinery” includes a variety of technologies utilized in manufacturing, like computer-controlled mechanical systems, milling machines, industrial stamping and pressing machines, and machine tools used for cutting and welding. Section 232 investigations do not require a public hearing, and in the past, investigations have resulted in tariffs in as little as 10–12 weeks.
- Tariffs on automobiles and auto parts from Japan were lowered to 15% on September 16, 2025, as part of the overarching trade deal with that country. This lower rate will cover passenger vehicles, light trucks, and automobile parts. According to customs data, automobiles and auto parts are the largest component of Japan’s exports to the United States, accounting for roughly $50 billion in 2024.
- On September 17, 2025, the U.S. Department of Commerce published an interim final rule creating a new inclusion process for cars and car parts under Section 232. Producers will be able to petition for additional parts to be tariffed at 25%. Requests can be filed quarterly. The Automotive Body Parts Association (ABPA) has voiced concerns the process could drive up repair costs, total loss frequency, and, as a consequence, insurance premiums.
- The Supreme Court has agreed to hear the U.S. administration’s appeal to a recent ruling that the government does not have the authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), which was used to establish the reciprocal tariffs on imports for most countries outside of China, Mexico, and Canada. Enforcement is delayed until October 14, 2025. If the tariffs are ultimately deemed invalid, there is uncertainty around if and how they will be reimbursed. Supreme Court briefings will likely conclude in late October, with hearings expected in early November and a decision expected in late November or early December.