John Murphy, auto analyst at BofA Securities, speaks at an Automotive Press Association event on ... More Wednesday Bill Koenig Vehicle prices will continue to increase amid tariffs and trade wars while electric vehicle demand is faltering, a Bank of America Securities auto analyst said Wednesday. “Costs are going up and prices will have to go up for consumers,” John Murphy, the analyst, said at an Automotive Press Association event at a regional BofA office in Farmington Hills, Michigan. The presentation took place in connection with the financial company’s annual Car Wars report. The auto industry is grappling with a trade war begun by President Donald Trump, who imposed tariffs on countries across multiple industries. Tariffs are paid by companies that import goods. Typically, that cost is passed along to consumers. Vehicle prices remain “fairly high,” Murphy said, and tariffs will boost those prices more. Trump imposed a 25% tariff on imported vehicles and parts. “In my judgment, it is necessary and appropriate to modify the system of monetary fees and related measures imposed to adjust imports of automobiles and certain automobile parts,” the president said in an April 29 statement. Murphy said his “gut estimate” is the vehicle tariffs may eventually shake out to 5% to 10%. “There is a lot of flailing between the U.S. and other countries,” the analyst said. In addition to higher prices, automakers are dealing with weaker-than-anticipated demand for electric vehicles. Companies such as General Motors Co. and Ford Motor Co. have invested heavily in EVs. Those investments don’t show signs of paying off. MORE FOR YOU Bitcoin ‘Going To Take Over’—Tesla CEO Elon Musk Backs Shock $40 Trillion U.S. Dollar Collapse Warning Amid Price Boom ‘Disgusting Abomination’: Musk Turns On Trump—Rips Policy Bill In New Angry Rant ‘NYT Mini’ Crossword Hints For Wednesday, June 4: Clues And Answers For Today’s Game The move to make more EVs occurred during the Biden administration, which promoted EVs as a way to reduce greenhouse gas emissions. The Trump administration is not an advocate of EV development. Murphy projected the number of EVs expected to be introduced will be cut in half over the next four years. “It’s kind of jaw dropping to see,” he said. “The money has been spent,” Murphy added of EVs. “You can’t get it back.” Automakers may have to take “multi-billion-dollar writedowns” of their EV investments, he said. “The unprecedented EV head-fake has wreaked havoc on product plans," the BofA Car Wars report said. “This has been driven by consumer disinterest and regulation/incentive changes. In addition, the recent tariff war is also complicating the equation.” As a result, “Total product activity is at a crawl,” according to the report. “OEMs are struggling with the powertrain conundrum, a new regulator/incentive regime, and uncertainty around tariffs.” BofA expects automakers such as GM, Ford and Stellantis will hold on to their traditional internal combustion engines, or ICE, powertrains longer. “We think that automakers must lean heavily into their core ICE product portfolios to generate the capital to fund the uncertain future.” Other conclusions in the report include: --Demand for crossover vehicles, which have increased since the late 1990s, are topping out. That “surge is done,” the report said. --The China auto market is struggling and could see “a massive consolidation,” Murphy said. “U.S. companies need to get out of China.” Editorial StandardsReprints & Permissions