Luxury Car Market Faces Price Hikes Due to Tariff
A 25% tariff on imported cars is set to impact European luxury automakers significantly, with U.S. buyers potentially facing substantial price increases. According to Tim Urquhart, principal automotive analyst at S&P Global Mobility, high-end buyers could see five-figure price hikes.
President Donald Trump announced on April 10 that his administration would enforce a 25% tariff on imported vehicles as part of a broader “reciprocal trade” policy. Although some tariffs were delayed for 90 days, this particular levy remained in place, affecting the ultra-luxury market severely.
Ferrari Raises Prices Amidst Market Uncertainty
Ferrari recently announced that it would increase prices on nearly all its U.S.-sold models by up to 10%. This price hike applies even to vehicles ordered months in advance, including the new Purosangue SUV and the 12 Cilindri grand tourer manufactured in Maranello, Italy. Urquhart commented that Ferrari, Bentley, and Rolls-Royce are in a challenging position, unable to absorb the 25% tariff, which will likely be passed on to customers.
Ultra-luxury brands have more pricing flexibility than mass-market automakers due to their premium prices. While Rolls-Royce, owned by BMW, is still assessing the situation, Bentley, a Volkswagen AG subsidiary, will continue U.S. imports but hasn’t decided on pricing adjustments.
Other Automakers Adjust Strategies
Other European automakers are responding quickly to the tariff. Jaguar Land Rover, owned by India’s Tata Motors, temporarily halted U.S. shipments to evaluate the impact. Audi, a Volkswagen subsidiary, was holding deliveries at U.S. ports as it considered its next steps. Mercedes-Benz is reevaluating its lower-end lineup, potentially pulling some entry-level models from the U.S. market due to profitability concerns.
The broader economic impact could be significant. A report by Anderson Economic Group estimated that U.S. consumers could pay over $30 billion in added costs from the tariffs in the first year alone. The average imported vehicle price could rise by $2,500 to $5,000, with ultra-luxury models experiencing even greater increases.
Philip Nothard, strategy and insight director at Cox Automotive, noted that shifting production to the U.S. to bypass tariffs would be a slow and costly process. “You can’t just suddenly set up production plants, supply chain, and labor overnight,” he said.
While several automakers reported strong sales gains in March, Porsche achieved its best-ever first quarter in the U.S., with Q1 2025 sales jumping 40.6%. The company attributed the record growth to strong demand for the 911 and Macan models.
