As we move further into 2025, the automotive industry is adapting to significant policy changes. President Trump’s second administration has implemented several new tariffs that are reshaping the vehicle supply chain. Let’s examine what these changes mean for your operations.

Current Tariff Situation

Here’s where things stand today:

• 10% tariffs on Chinese imports, with an additional 10% implemented shortly after
• 25% tariffs announced on Mexican and Canadian imports (with a 30-day implementation delay)
• Potential European import tariffs under consideration
• No duty remission allowances for cross-border component assembly

These tariffs apply to both completed vehicles and the parts ecosystem that supports fleet maintenance operations. The temporary delay for USMCA-covered goods provides a planning window for fleet managers to adapt their strategies.

It’s important to note these specifics can change at any time.

Effects on Fleet Acquisition

Industry analysts project price adjustments of approximately $3,000 per vehicle on average, though this will vary by model and manufacturer. Key considerations for fleet planning include:

• U.S.-assembled vehicles will still experience price adjustments due to imported components
• Production shifts may temporarily affect vehicle availability timeframes
• Manufacturers are likely to distribute cost increases strategically across product lines

Several OEMs are already adapting their production strategies. Ford is evaluating shifts to U.S. facilities where feasible, and Honda has indicated plans to relocate Civic production domestically. These transitions represent standard industry adaptation to changing market conditions.

Total Cost of Ownership Considerations

For fleet professionals, these developments affect multiple aspects of the TCO equation:

• Maintenance budgets may require adjustment as parts pricing evolves
• Insurance carriers may update their risk models to account for repair cost changes
• Parts logistics planning becomes increasingly important for minimizing downtime
• Asset valuation strategies may need refinement as market dynamics shift

For perspective, maintenance expenses for typical Class 1-2 service vehicles could see adjustments based on parts sourcing patterns, making this an opportune time to review maintenance agreements.

Strategic Approaches for Fleet Managers

Drawing from industry best practices, here are several approaches worth considering:

1. Review acquisition timelines: If replacements are scheduled in the coming 6-12 months, evaluating current market conditions may inform optimal purchasing windows.
   
2. Assess lifecycle optimization: For vehicles with remaining useful life, enhanced maintenance protocols might offer favorable economics compared to immediate replacement.
   
3. Explore manufacturer diversification: Different OEMs have varied production footprints, potentially offering alternative procurement options worth examining.
   
4. Update parts procurement strategies: Collaborating with maintenance partners on component pricing can provide greater budget predictability.
   
5. Review maintenance reserves: If you manage self-insured maintenance programs, this represents a natural time to revisit allocation models.
   

Industry Evolution

These market adjustments may accelerate several positive developments in the fleet sector. We could see expanded domestic EV manufacturing capacity, growth in U.S. parts production, and more regionalized supply chain networks.

Forward-thinking fleet organizations can position themselves advantageously through this transition period. Those who adapt their processes thoughtfully often discover operational efficiencies that deliver lasting value.

The key is developing a tailored approach based on your specific fleet composition and business requirements. While market conditions continue to evolve, implementing measured adjustments to established practices ensures operational continuity and effectiveness.

In fleet management, our focus remains steady: anticipating industry developments and positioning our organizations accordingly. With informed planning, these changing market dynamics become simply another variable in our ongoing operational excellence.

Need help figuring it all out? You’re not alone. Onward Fleet Solutions is here to focus on the ins and outs of the fleet industry so you can focus on the success of your business. Get in touch today to learn how we can help you streamline operations.