BMW Is Set to Face New Tariffs While VW and Stellantis Avoid the Impact | Carscoops

      BMW seems to be falling short of the requirement that 75% of a vehicle's components must come from North America to bypass the tariffs.

      To avoid the newly implemented tariffs, vehicles must have at least 75% of their parts sourced from North America.

      About 10% of BMW's new cars sold in the U.S. are imported from Mexico.

      The new tariffs could potentially impact BMW’s earnings before interest and taxes (EBIT) by approximately €400 million ($434 million).

      Unlike BMW, competitors Volkswagen and Stellantis will be able to evade the new tariffs imposed by President Donald Trump on vehicles manufactured in Mexico and Canada. This is particularly ironic since BMW produces hundreds of thousands of vehicles annually in the U.S., making it the nation's leading vehicle exporter by value. In 2024, the company exported almost 225,000 SUVs and crossovers to global markets.

      As part of his initiative to enhance domestic production, the President has recently enacted a sweeping 25% tariff on imports from Mexico and Canada. However, he quickly allowed a 30-day deferment for the auto industry, announcing that cars manufactured in line with the United States-Mexico-Canada Agreement (USMCA) trade deal would be exempt from the tariff.

      The Regulations

      According to the USMCA guidelines, at least 75% of a vehicle’s parts must be sourced from North America to qualify for exemption from the new tariffs. Volkswagen has confirmed that vehicles it produces in North America meet these standards, allowing them to avoid the 25% tariff.

      “Our North American assembled VW-brand vehicles comply with the USMCA rules of origin and are sheltered from the 25% tariffs,” VW informed CNBC. “As a global automotive manufacturer, we are closely monitoring developments in North America to assess any potential impacts on the automotive sector and our company resulting from the tariffs announced for the USA, Canada, Mexico, and the European Union.”

      Challenges for BMW

      The situation is not as favorable for BMW. Although a significant portion of the company’s U.S.-built cars are sold domestically, around 10% of the BMWs in the U.S. are imported from Mexico. Models such as the 2-Series and 3-Series fall into this category, and with the new tariff in effect, their prices have become significantly less competitive. BMW has referred to the trade landscape in North America as “very volatile and complex,” confirming that it will “definitely be among the companies affected.”

      “Our stance remains unchanged: Free trade, which has always been a core principle for the BMW Group, is crucial on a global scale,” the brand stated. “Tariffs, however, obstruct free trade, hinder innovation, and create a negative chain reaction, ultimately harming customers by making products more expensive and less innovative.”

      Analysts from UBS are forecasting that the new tariffs may reduce BMW’s EBIT by approximately €400 million (~$434 million), unless they raise prices to mitigate the impact.

      Stellantis Avoids the Mess

      In contrast, Stellantis, which oversees the Chrysler, Jeep, Dodge, Alfa Romeo, Fiat, and Maserati brands, has completely navigated this tariff issue due to the USMCA exemption. The company has also expressed gratitude to President Trump for keeping its North American operations free from tariffs.

      “We align with the President’s aim to produce more American cars and generate lasting American jobs,” the company stated. “We look forward to collaborating with him and his team.”