Tariffs and Chips Plan Threaten Auto Makers

An editorial look at how tariff policy shifts, tax credit changes, and a proposed chip tariff may affect EV margins and supply chains.

Tariffs and Chips Plan Threaten Auto Makers

Rivian and Lucid flag major policy risks in their latest 10Q filings, focusing on the One Big Beautiful Bill Act and how it could cut tax credits for EV buyers and dent zero-emissions credit markets. The companies describe a landscape where tariff changes and credit revisions could push costs higher and complicate planning for production and supplier management. Ford and GM also mention the OBBBA, with GM warning that the policy could be material and hurt EV profitability, while Rivian remains optimistic about domestic battery credits. The piece also flags a potential 100 percent tariff on imported semiconductors, a move that could tighten margins across the industry given the large chip content in today’s cars. The administration’s exemption rules remain unclear, and automakers say the path to relief is uncertain to say the least. Outside of policy chatter, deals and market moves highlight the sector’s urgency: Joby’s acquisition of Blade provides a route to faster routes to market for electric air mobility, while other aerospace and robotics moves underscore a broader push for domestic capabilities and diversified supply networks.

Policy uncertainty now sits at the center of the EV business. The same firms racing to bring affordable electric cars to their balance sheets must also manage fiscal policy shifts, tariff regimes, and the evolving regulatory credit landscape. If Washington leans into stricter credits or steeper tariffs, margins will become a moving target, not a fixed line item. In this climate, the winners will be those who can diversify suppliers, accelerate domestic production where it matters most, and price risk into product plans rather than hope policy steadies. The market looks for clarity on exemptions and timing, but the broader message is clear: policy is now a core variable in EV profitability, not a peripheral backdrop. As Chinese tech interest and US manufacturing push intersect, the industry is likely to see more cross-border moves and more aggressive bargaining in Washington. Expect investors to prize resilience and transparency over glossy projections as these rules evolve.

Highlights

Policy, politics, and the race for domestic capabilities will keep shaping the EV journey.