What’s News in Earnings: How Automakers Overcame Tariffs and Supply-Chain Snafus

Summary

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WSJ What’s News — What’s News in Earnings: How Automakers Overcame Tariffs and Supply-Chain Snafus

Published: November 6, 2025
Host: Chris Otz (Wall Street Journal)
Guest: Steven Wilmot (WSJ European Autos Reporter)

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Episode Overview

This episode takes a close look at how global automakers are navigating the latest round of supply-chain disruptions, tariff impacts, and the changing landscape of electric vehicle (EV) support in the U.S. Despite formidable headwinds—including a renewed chip crisis, costly tariffs, and fading U.S. EV incentives—automakers are delivering surprisingly solid earnings. The discussion spotlights how industry leaders are responding to and strategizing around these challenges.

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Key Discussion Points & Insights

1. Resurgence of the Chip Crisis

• Background:
  The automotive industry is facing a fresh semiconductor shortage reminiscent of the COVID-19 era, largely due to trade tensions involving Nexperia, a Dutch chip firm acquired by a Chinese company.

• Steven Wilmot (01:48):

  • Chinese government halted exports of Nexperia chips from China, impacting global automakers.
  • Recent US-China negotiations led to some easing, but supply remains tight:
    “Chip supplies do seem to be easing, but they remain tight.”

• Automaker Response:
  Automakers are aggressively seeking alternative suppliers.

  • “For the short term, we're covered. And it goes without saying that we're scurrying around the world to look for alternatives.”
    —Ola Källenius, Mercedes CEO, (02:56)

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2. Tariff Relief and Its Impact

• Trump-Era Tariffs:
  Automakers have faced steep tariffs, costing billions, but 2025 has brought relief via international agreements.

• Steven Wilmot (03:20):

  • Recent deals with EU, Japan, and S. Korea reduced some tariffs.
  • Temporary effects: Automakers front-loaded shipments to beat the tariffs and later worked down excessive inventories, muting the immediate benefit.

  “Those effects kind of balance each other out… But, yeah, the outlook is looking a bit less bleak than it was three months ago.” (03:20)

• Chris Otz (04:22):

  • US automakers (Ford, GM, Stellantis) benefit from a revised parts tariff rebate program, saving hundreds of millions to over a billion dollars annually.
  • “Ford said that they would benefit by about $1 billion just from this one change that Trump made with the parts tariff.” (04:22)
  • The program runs through 2030, lifting stock prices, especially for GM.

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3. The End of US EV Incentives & the 'EV Winter'

• EV Tax Credit Expiring:
  The last quarter for the $7,500 federal EV tax credit triggered a final surge in US EV sales.

• Industry Impact:

  • Even Tesla, whose core auto business has stagnated, saw a lift.
  • Legacy automakers poised for a sharp drop in EV sales as incentives disappear.

• Chris Otz (05:53):

  • “It looks like we're now entering what we might call an EV winter—figuratively, literally.”
  • Ford expects EV sales to drop by half; legacy automakers reevaluate their EV commitments.

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4. Backtracking on Electric Vehicle Strategies

• European Automaker Losses:

  • Porsche logged its first quarterly loss since going public, postponing EV projects into the 2030s.

  • Mercedes and BMW also experience EV headwinds but less so for BMW due to a slower ramp-up.

    —Steven Wilmot (06:48):
    “It's been most dramatic at Porsche, which had its first quarterly loss since its IPO three years ago… but we've also seen similar things this year from Mercedes, BMW, a bit less so because it was a bit slower to invest in EVs.”

• US Automakers’ U-turn:

  • Ford reconsidering EV output due to $5 billion annual losses from the segment.

  • GM, despite pledging “all EV by 2035,” is rethinking production targets and taking charges for unused capacity.

    —Mary Barra, GM CEO (08:07):
    “We're going to stay true to what we've said before, that we're going to build to consumer demand. We're not going to overbuild. We're going to maintain that discipline.”

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Notable Quotes & Memorable Moments

• Ola Källenius, Mercedes CEO (02:56):
  “For the short term, we're covered. And it goes without saying that we're scurrying around the world to look for alternatives.”

• Steven Wilmot (03:20):
  “Those effects kind of balance each other out a bit… So it wasn't quite as simple as saying it was a much easier quarter. But, yeah, the outlook is looking a bit less bleak than it was three months ago.”

• Chris Otz (04:22):
  “Ford said that they would benefit by about $1 billion just from this one change that Trump made with the parts tariff.”

• Chris Otz (05:53):
  “It looks like we're now entering what we might call an EV winter—figuratively, literally.”

• Steven Wilmot (06:48):
  “It's been most dramatic at Porsche, which had its first quarterly loss since its IPO three years ago because it wrote down a lot of the investments it had made into electric vehicles.”

• Mary Barra, GM CEO (08:07):
  “We're going to stay true to what we've said before, that we're going to build to consumer demand. We're not going to overbuild. We're going to maintain that discipline.”

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Key Timestamps

| Timestamp | Segment | |-----------|------------------------------------------------------| | 00:37 | Introduction and overview of automaker challenges | | 01:48 | Chip supply crisis explained (Wilmot) | | 02:56 | Mercedes CEO on chip workarounds | | 03:20 | Tariff situation and European automakers | | 04:22 | US automakers and tariff rebate program | | 05:53 | Expiring EV tax credits and sales surge | | 06:48 | Porsche's EV losses and European automaker reactions | | 07:19 | US automaker EV strategies and backtracking | | 08:07 | GM’s Mary Barra on matching EV supply to demand | | 08:17 | Wrap-up and closing remarks |

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Conclusion

This episode presents a nuanced look at a resilient auto sector adapting to recurrent supply shocks, evolving trade policies, and a dramatic shift in the electric vehicle landscape. Both host and guest provide industry-insider perspectives on how earnings are shaped by political decisions, shifting incentives, and corporate strategy pivots—resulting in a more cautiously optimistic future for automakers, even as the “EV winter” deepens.

Transcript

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[Chris Otz]

I'm Chris Otz for the Wall Street Journal and this is what's News in Earnings, our look at some of the biggest themes standing out this earnings season. Global automakers are steering through a barrage of obstacles. New supply chain crises are resurrecting nightmares from the COVID pandemic. Tariffs are zapping billions from their bottom lines, yet no one wants to raise the price of their cars. Meanwhile, electrification is slowing. The US has all but done away with any support for EVs, and yet through all these storms, automakers are largely delivering solid results. I've been following US Car companies earnings and I'm joined by Steven Wilmot, our European autos reporter in London. Steven, it's 2025, not 2021, but we're once again talking about a crisis involving chips and automotive production. Pretty much every automaker is possibly affected by issues involving a Dutch Chinese company called Nexperia.

[Steven Wilmot]

Yeah, that's right. This Dutch semiconductor company, which was taken over by a Chinese company, found itself in a sticky situation with the Dutch government. And then the Chinese government stopped shipping Nixperia chips from China to its global customers. And for automakers, they haven't been getting as many components that include all these basic chips that are ubiquitous in cars these days. And then the Trump Xi talks happened. Then the US Government said that it would postpone its extended blacklists. And then that prompted the Chinese government to start to lift restrictions on nextbird chip exports from China. But it said it would only do it for some companies. And so the situation as we stand now this week is that chip supplies do seem to be easing, but they remain tight.

[Chris Otz]

Yeah, so automakers are all looking around for alternative sources of supply for these chips. And here's what Mercedes CEO Ola Calanius had to say on an investor call last week.

[Automaker CEOs (Ola Källenius and Mary Barra)]

For the short term, we're covered. And it goes without saying that we're scurrying around the world to look for alternatives.

[Chris Otz]

Let's turn to the auto story of the year. President Trump's tariffs. These are definitely costing automakers and their suppliers billions of dollars. But this earnings season, it seems the theme is more about relief from tariffs.

[Steven Wilmot]

Yeah, that's right. We've had the deals between Trump and the EU on the one hand, and then Japan and South Korea most recently, and that's been a relief for sure for the European automakers. In the most recent quarter, only one month had the old 25% tariff and then two months of 15% tariffs. So that was a help. It wasn't as much of a help as you might think because the automakers in Europe shipped loads of vehicles in the first quarter ahead of the tariffs coming into effect. And so they channel stuffed, as they say, the industry in the first quarter, which meant that they didn't actually import so much in the second quarter. So the tariff effect was not as much as it might have been otherwise. But then, of course, they've run out of the stock, the inventories that they accumulated, so. So they had to carry on importing in the most recent quarter. Those effects kind of balance each other out a bit. So it wasn't quite as simple as saying it was a much easier quarter. But, yeah, the outlook is looking a bit less bleak than it was three months ago.

[Chris Otz]

Well, let me tell you, Steven, here in the States, the automakers that produce in the US Definitely noticed those deals with Japan and the eu, the UK and they are saying, hey, is it less costly now with all the tariff impacts to make a car in Japan and import it to the US Than to just build it in the United States? The Trump administration has been listening to that lobbying effort. And the administration relaxed and enriched, extended a program where automakers essentially get rebates from tariffs on the parts that they import to make vehicles in the United States. And this led to an immediate benefit for Ford, GM and Stellantis, that's the parent company of Jeep and Ram. General Motors and Stellantis both talked about roughly $500 million savings on the tariffs that they had told investors that they were facing just in 2025. And Ford said that they would benefit by about $1 billion just from this one change that Trump made with the parts tariff. And investors are looking forward to what that change will mean in future years. It goes through 2030, well past when Trump is in office. And so we're seeing the stocks of Ford and gm, especially gm, really rally off of their earnings from the relief from this parts program. Meanwhile, this was the final quarter in which we had that $7,500 tax credit for buying an EV in the United States. And that led to a surge in EV sales for legacy automakers and even for Tesla, whose core auto business has been stagnant at best this year. And then for the legacy automakers, it looks like we're now entering what we might call an EV win, figuratively, literally. Ford CEO Jim Farley has talked about EV sales dropping by half. And it's an issue for pretty much all of the automakers who have invested in EVs, which I know the German companies have done to a great extent.

[Steven Wilmot]

Absolutely. This has been a huge theme of the earnings season. It's been most dramatic at Porsche, which had its first quarterly loss since its IPO three years ago because it wrote down a lot of the investments it had made into electric vehicles. It said a big EV project would be postponed in the2030s. But we've also seen similar things this year from Mercedes, BMW, a bit less so because it was a bit slower to invest in EVs.

[Chris Otz]

We're also seeing the US automakers basically pulling a aggressive U turn on electric vehicles. Ford, they talked about how they've got a big decision point about how many to continue making. They're losing $5 billion a year on EVs and investors are really looking to see, well, can they make that 2 billion or 3 billion and what would that mean for the stock in the short term. And then there's General Motors which talked about going all EV by 2035, yet now they are backtracking. They're taking charges for capacity that they're not going to use and they're saying that they're going to be disciplined. Here's what CEO Mary Barra said on their earnings call.

[Automaker CEOs (Ola Källenius and Mary Barra)]

We also are going to stay true to what we've said before, that we're going to build to consumer demand. We're not going to overbuild. We're going to maintain that discipline.

[Chris Otz]

Well, Stephen, lots of short term challenges and long term issues to follow in auto's industry. Thank you so much for joining me today.

[Steven Wilmot]

Thanks for having me on.

[Chris Otz]

And that was what's news in earnings. Today's show was produced by Zoe Kulkin with Deputy editor Chris Zinsley. Additional sound courtesy of S and P Global Market Intelligence. Later today we'll have the PM edition of what's News out for you as well. I'm Chris Otz. Have a great day.

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