Welcome to the Daily 5 report for Friday, April 18.
"If you ask me what's keeping me up at night, it's the steel and aluminum derivatives," an executive at a major auto supplier told Automotive News this week.
That's one of the devils in the details of President Donald Trump's tariffs being absorbed by automakers and their supply chains.
Our story today by John Irwin explains the insidious nature of the tariffs on steel and aluminum — and the cumulative effect they are having on the companies that make parts and components destined for North American automotive assembly plants.
Read more: Live updates on tariff news and impacts
Interactive map: Auto manufacturing sites in Canada, the U.S. and Mexico
The swift implementation of the expanded steel and aluminum tariffs and the confusion
they've created throughout the supply chain are emblematic of the broader impact of the Trump administration's levies on the auto industry, Irwin writes. Companies are scrambling to keep up with quickly changing, sometimes opaque rules and trying to determine just how much tariffs will cost them, sometimes with little luck.
"Visibility right now is extremely low, and the fog of war is very thick," Felix Stellmaszek, global leader of Boston Consulting Group's automotive and mobility practice, said in the story.
Meanwhile, anyone in the used-car business should take a close look at this story about the Hertz stock surge on Wall Street this week. Longtime Wall Street titan Bill Ackman is making a big gamble that used-car prices are going to rise because of the Trump tariffs. He has acquired a 20 percent stake in Hertz Global Holdings Inc. Here's what he wrote on X:
"Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. A 10 percent increase in used-car prices would equate to a $1.2 billion gain on its auto assets — equivalent to approximately half of the company's current market capitalization."
Hertz investors believe him. Shares in the company jumped 44 percent in trading on Thursday, extending a two-day rally in which the stock more than doubled in value, Bloomberg reported.
Speaking of tariffs, the phrase "too big to fail" was nearly everywhere during the Great Recession, but it might be time to add a new saying to the automotive lexicon as the industry tries to feel its way through the tariff minefield: too big to move.
Reuters reported with unnamed sources from Tokyo today that Toyota Motor Corp. is considering producing the next version of its top-selling RAV4 compact crossover in the U.S., saying the Japanese automaker wants to expand RAV4 production at its massive assembly complex in Kentucky — which already produces some RAV4s sold in the U.S.
But here's where math comes into play: the RAV4, which dethroned the Ford F-150 as the nation's top-selling nameplate last year with 475,193 deliveries, is too big of a global sales hit to consolidate all its production in Kentucky. In 2024, Toyota produced 373,510 RAV4s in North America that were sold in the U.S. — about 79 percent of which (293,602) came from its plant in Canada.
In addition, Japan produced 58,368 RAV4 plug-in hybrids, the RAV4 Prime, in 2024, about half of which were sent to the U.S. The rest, roughly 150,000, came from Georgetown, which was about a third of that plant's overall 2024 vehicle production of 435,631.
So really, even if Toyota wanted to move heaven and earth to bend to the will of the White House, it can't, or it will give up sales. So expect the RAV4 to stay at all three plants, though the mix is likely to be adjusted.
We've seen several stories with unnamed sources move out of Asia in recent weeks as Japan negotiates a trade deal with the Trump administration. Go figure.
That's it for today. Have a great weekend. As noted below, markets are closed for Good Friday, so the Daily 5 stock charts are not available.
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— Philip Nussel, online editor
Larry P. Vellequette, who covers Toyota for Automotive News, contributed to this report.
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