Real World Reaction To Tariffs Automotive Weekly

A growing share of American drivers are finding themselves "underwater" or "upside down" on their auto loans, reaching a four-year high, according to data from Edmunds. More than one in four (26.6%) of new vehicle trade-ins carried negative equity during the second quarter of 2025. This is up from 26.1% in Q1 2025 and marks the highest level in four years. The last time a higher percentage was recorded was Q1 2021, when nearly a third (31.9%) of new car trade-ins were underwater. Being underwater on an auto loan isn't a new phenomenon. Still, the combination of affordability pressures, negative equity and higher interest rates is creating a challenging financial environment for American car buyers. The average amount owed on upside-down loans was $6,754, slightly lower than Q1 2025's $6,880 but up from $6,255 in Q2 2024.

After Running Refiners Out Of Town

Democratic California Gov. Gavin Newsom signed a set of energy bills Friday with the goal of lowering energy costs and stabilizing gas supply after years of allowing strict regulations to clamp down on the state's oil and gas industry.

The set of bills were designed to "stabilize" California's gasoline market by paving the way for more oil development in Kern County as well as working to "encourage" oil refiners to continue operations, though they will also keep California's high speed rail project and its cap-and-trade program alive, according to Newsom's office. Two major California refineries are gearing up to shut down after Democratic officials enforced stringent regulations that have helped prompt closures across the state for years while Newsom has previously sued and demonized energy companies.

"The Legislature recognizes the significance of oil and gas production in the County of Kern, while also affirming the state's commitment to protecting public health, safety, and environmental quality, particularly for communities located near oil and gas operations," one of the bill text states.

"After years of pushing radical climate policies that punished working families, Governor Newsom is finally waking up to what Californians need, he's now scrambling to secure the very fossil fuels he tried to eliminate," CEO of the American Energy Institute Jason Isaac told the Daily Caller News Foundation previously. "This sudden embrace of petroleum isn't leadership, it's survival. California's energy future depends on realism, not green delusions."

Notably, Newsom's office claims that one of the bills will make "high-speed rail a reality by providing its first-ever stable source of funding." California's high speed rail project is billions over budget and years behind schedule, though recent polling shows that many residents still believe that the project can be completed.

Source: Independent Journal Review

Ford is racing to sell more F-150 pickups this quarter by offering lower interest rates to buyers with the weakest acceptable credit histories. The deal available until the end of the month will allow consumers with shakier credit profiles to pay the lower interest rate offered to those with stellar credit records. Ford is courting these low-credit customers as it looks for a strong close to the quarter for its best-selling pickup, which starts around $39,000 and goes to almost $80,000. Like most automakers, Ford has been largely absorbing the costs of tariffs on imported steel, aluminum and auto parts to keep plants humming and sales volumes high, even as it cuts into profits.

Most U.S. car dealers expect artificial intelligence (AI) to significantly impact their operations, with half predicting AI will cut jobs by 2030. By 2035, 87% believe AI will fully replace some human roles. Only 5% think AI will never replace dealership staff entirely. The findings come from a nationwide survey of 500 U.S. car dealers commissioned by dealer tech company Phyron. The results align with a McKinsey report predicting 400 to 800 million global jobs could be displaced by new technologies, including generative AI, within five years. Yet, workers handling complex or 'messy' tasks, i.e. those managing multiple information streams and dynamic situations, face little immediate threat from AI, according to Phyron CEO Mattias

Jaguar Land Rover is trying to clear a backlog of payments owed to suppliers to ease a crisis caused by a cyberattack that's brought the carmaker's factories to a standstill, people familiar with the matter told Bloomberg. The British automaker's systems were brought down by the hack, leaving it struggling to pay suppliers — many of which are small manufacturers reliant on JLR's business. In recent days, JLR has paid roughly £300 million ($405 million) to partners and aims to clear the backlog by the end of the month, one of the people said, asking not to be identified discussing confidential information.

Source: Automotive News

Honda is ending U.S. production of its Acura ZDX electric vehicle, which had been scheduled to begin its 2026 model year production this month at General Motors' Spring Hill Assembly plant in Tennessee, according to information obtained by the Detroit Free Press. The company said the decision reflects current market conditions for electric vehicles and its long-term strategic priorities. The automaker confirmed that production of the Honda Prologue, another electric model assembled by GM in Mexico, will continue. Honda said the ZDX provided a foundation for its electrification strategy and will be followed by the all-electric Acura RSX, set to launch in Ohio in the second half of 2026, along with hybrid-electric Acura models now in development.

Metal Tariff Costs Rise, Analysts Say

High tariff costs and President Donald Trump's deregulatory push could cause some automakers to de-emphasize lightweighting to save money and avoid significant vehicle price increases, analysts said. Trump's duties on vehicles, parts, steel and aluminum are expected to cost the industry $188 billion over the next three years, or about $4,600 per vehicle by 2027, according to the Center for Automotive Research. Those staggering costs are forcing companies to rethink supply chains and reevaluate their product and investment plans to minimize tariff exposure. Automakers might consider buying a heavier but less expensive version of a part from a supplier as a way to cut costs, said Stephanie Brinley, associate director of AutoIntelligence at S&P Global Mobility.

Source: Automotive News