Welcome to the Daily 5 report for Monday, April 14.
Is it possible that there are businesses actually benefiting from the Trump tariffs? Reporter Molly Boigon's story points out that domestic battery recyclers, U.S. steel and aluminum producers and some automakers with significant American footprint could benefit — but the trade situation's complexity offers no guarantees, analysts told Automotive News.
Battery recyclers and steel and aluminum suppliers could be tapped to fill the gap created by duties and China's withholding of critical rare-earth minerals. Still, they would have to make huge investments with no certainty about the future of the tariffs. And while automakers such as Honda and Tesla have a relative edge over those that have more capacity abroad and a greater reliance on foreign components, even they will feel the pain since no auto manufacturer has a fully domestic supply chain. The industry is hoping President Donald Trump makes good on his statement earlier today that he is exploring possible exemptions on imported vehicles and parts to give automakers more time to set up U.S. manufacturing.
One automaker not yet concerned about tariffs is one of Volkswagen Group's youngest brands, Cupra. Timing appears to be on Cupra's side: It is still years away from starting U.S. sales. The sporty brand from Spain plans to enter the U.S. market by 2030. Cupra, as early as March 2024, made it clear it intends to use one of VW Group's North American assembly plants but hasn't said which one.
Meanwhile many of the lowest-priced vehicles sold in the U.S. are assembled in other countries, making them particularly vulnerable to the 25 percent tariffs. That has dealers such as Lance Iserman concerned. With sub-$30,000 vehicles in high demand, he hopes automakers won't limit availability of models made in Mexico in particular to mitigate the cost of tariffs. Tighter inventory of cheaper vehicles will drive up prices "tremendously," he added, adding pressure to an industry that already has seen customers squeezed by rising transaction prices and interest rates.
"That's not going to help our new-car volume," said Iserman, CEO of Morrie's Auto Group in Minneapolis, with 31 dealerships in the upper Midwest. "That's going to put people back on the sidelines or move them to used vehicles."
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Amongst all the talk of China's withholding critical rare-earth minerals, Chinese battery giant Contemporary Amperex Technology Co. reported a 33 percent jump in first-quarter earnings, defying a slowdown in electric-vehicle demand and a drop in the prices of the cells that power them. Net income came in at 14 billion yuan ($1.9 billion), versus estimates of $1.89 billion, CATL said in an exchange filing April 14.
Revenue grew just over 6 percent year on year to $11.6 billion, slightly less than what the market is looking for. CATL's scale means it's often able to spread costs out and deliver greater efficiencies. CATL's statement didn't address the company's immediate outlook, but as a top supplier to Tesla and many other large automakers, the world's No. 1 maker of EV batteries risks being caught in the crosshairs of geopolitics.
Finally, make sure you check our tariff liveblog for all the latest updates.
That's it for now. Have a great rest of your day.
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— Wes Raynal, assistant web editor
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