Why Ford F-150 Buyers Might Be The Most Screwed By Metal Tariffs

Running a business in a trade war is like jumping on one of those terrible old spring beds piled high with all your most valuable possessions. Some of your things won’t move at all, others will hop safely toward the pillows, and some of your best stuff will get randomly rocketed straight into your bedside mirror. Oh no, there goes your vintage record player and three signed Dave Brubeck albums! Is there anything more prized by Americans than the Ford F-150? Historically, no, so that’s why it’s a big deal it might get pricier.

This trade war might also cause Audi’s prices to go higher, which is just one of about a million problems at Audi. The automaker was just outsold by Tesla for the first time ever as the company’s CEO tries to grapple with a crisis every minute. It’s not like Tesla is in great shape; retaliatory measures are hitting Elon Musk’s automaker in our great potential 51st state of Canada.

Mazda has a plan to get through all of this, and it’s called an “Asset Light Strategy,” which, coincidentally, was my own personal economic strategy for most of my 20s. That wasn’t a plan so much as something that just happened to me, but let’s see how it works out for Mazda.

Ford Says It’ll Be ‘Difficult’ To Offset Cost Of Metal Tariffs

Automotive tariffs against Mexico and Canada were temporarily halted because, well, I’m not really sure. The unpredictability of it all means that by the time I’m done writing this, there may be a 500% tariff against Martian sand. I won’t make this too long then, but I think it’s important to talk about why Ford is somewhat more screwed than others, why we don’t process a lot of automotive-grade aluminum in the United States, and why all this confusion is bad for business.

Let’s go back in time to the beginning of the Obama Era. The country was getting out of a recession, had just weathered a few major disruptions in oil prices, and was suddenly feeling more concerned about the environment (though to be clear CAFE requirements existed before then). Ford’s bread-and-butter F-150 was in the midst of being revolutionized for a new era, and so Ford engineers decided to switch to aluminum for a big portion of its world-beating half-ton pickup (including the hood, doors, and the bed). The idea here is that aluminum is lighter than steel, and a lighter truck is more efficient. Other truckmakers gave Ford some crap for this, but time has proven the haters mostly wrong. Ford kept selling the trucks and, since a large percentage of trucks are just glorified sedans at this point, it hasn’t been the issue some predicted.

Partially out of a desire to bring more blue-collar jobs to the United States, President Trump has instituted a blanket 25% tariff on imported steel and aluminum. For steel, this doesn’t seem to be quite as big of a deal, as the country has a decent base of suppliers following tariffs put in place in 2018. Aluminum is way harder to produce in America, though. Why?

As The Wall Street Journal points out, aluminum is hard to smelt efficiently here in the United States:

Aluminum smelters use gobs of electricity, accounting for about 40% of their operating expenses, and rising power costs contributed to their dwindling presence in the U.S., where smelters in operation have shrunk to four from seven five years ago.
Smelters in Canada, meanwhile, have access to low-cost power from hydroelectric generators.

Alcoa asked the Trump administration to exempt Canadian primary aluminum from the 25% tariff on grounds that the additional production can’t be started in the U.S. without a plan for lower-cost electricity.

“Our deeply integrated aluminum supply chain with Canada has supported many American industries, including automotive,” Alcoa said.

This is the whole point of trade. It’s possible to put American laborers in jobs where they make aluminum, but it would be more expensive for consumers across a wide range of products. It might be worth it if this creates more jobs, but as Alcoa points out, the benefit of the current arrangement is that aluminum is produced more efficiently (and in a more environmentally friendly way) in Canada. When it’s sent to the United States, instead of having certain laborers create a basic commodity, American workers could be using that aluminum to build cars, washing machines, or other more advanced products. The more advanced your product, typically, the more money you earn as a laborer. These are better jobs.

American aluminum, being de facto more expensive, might find a market with American companies, and jobs could be created, but the price of all of those increases will land on consumers. Ford has tried to get ahead of this by stockpiling automotive-grade aluminum, but it’s not a supply chain that can be turned on overnight:

A Ford spokesman said it would take many years to rewire its supply chains to get more automotive-grade aluminum from the U.S. He declined to comment on the potential effect on prices should the tariffs last.

“While we are working to find offsets to the added cost, this will be difficult,” he said.

Ford isn’t the only company being hit here, but the F-150 is kind of the perfect poster child for why this whiplash form of governance is difficult for automakers. Expecting emissions standards to go up and free trade to continue, Ford made a better product it could sell at a price that would make it competitive in the marketplace. Now it’s seeing a risk of higher aluminum costs and diminished trade. The company could make its trucks out of more steel, eventually, but at the cost of efficiency. What happens if the next administration reinstitutes higher EPA standards?

It’s a hard game to win, this back-and-forth thing.

Audi Is In Bad Shape, Part 9000

It seems like most of the news about Audi lately has been bad. The automaker has lost the plot. In one way, Audi is the automaker most associated with aluminum automotive construction and thus most at risk of being hurt here, but it doesn’t make any cars in the United States so it’s probably less impacted. On the other hand, Audi does make cars in Mexico.

If there’s any company that can’t afford a disruption right now it’s Audi, which is part of the VW portfolio.

The brand’s profits were down 33% year-over-year, as competition from China and restructuring hit the bottom line. It’s a great brand and turning it around has proven to be quite difficult for CEO Gernot Döllner according to this latest report in Germany’s Manager Magazin:

Audi sold just under 1.7 million vehicles in 2024, 224,000 fewer than a year earlier and, for the first time, fewer than electric rival Tesla. Profits are sinking in the direction of their Wolfsburg-based sister company VW, regularly ridiculed by the Ingolstadt-based company: 2.5 percent operating return on sales after nine months. Even the likely significantly better fourth quarter is unlikely to lift the annual result to premium levels.

Döllner is experiencing bad figures and trouble everywhere; even in the formerly reliable German market, the mood is at rock bottom. One supervisory board member speaks of “chaos days since he arrived. Nothing works.” There’s no improvement in sight.

A new Q5 might help, as that’s the brand’s F-150, but that vehicle is built in San Jose Chiapa, Mexico. Will the company have to increase costs to offset tariffs? From Reuters, it’s being discussed:

“This is what we are pursuing. And we are pursuing this regardless of the changes in the political landscape in the USA,” Doellner said, referring to import tariffs the U.S. administration under President Donald Trump has launched on products from Mexico and Canada.

Doellner said he expects a decision on localizing production in the North American market, which could include using existing Volkswagen factories as well as a new site, this year.

Could Audi produce the A5 in Chattanooga? It’s not an entirely crazy idea. This is one of the potential positives of a trade war, as automakers are looking to see where they can expand production in the United States.

Tesla Faces Trade War Reciprocation In Canada, Vibe Shift Everywhere

This might be hard to grasp, given Tesla CEO Elon Musk’s own rhetoric about government waste, but Tesla is the poster child for government investment. Globally, Tesla directly or indirectly got money from local/state/federal governments because what Tesla was doing was helping save the world. It’s still getting a lot of that money today.

To many, Musk is now still saving the world in his role as an advisor to President Trump. Polling shows that, to others, Musk’s behavior shows he’s now hurting the world more than he’s helping.

Governments, especially in Canada, are fighting back according to a report from Reuters via MSN:

Toronto is no longer providing financial incentives for Tesla vehicles purchased as taxis or ride shares due to trade tensions with the United States, the city’s mayor, Olivia Chow, said on Monday.

The city is promoting the adoption of electric vehicles purchased as vehicles for hire by giving drivers and owners a reduction in licensing fees and renewal fees until the end of 2029, to help it lower emissions.

But as of March 1, Tesla vehicles are no longer eligible for the incentives, Chow said at a news conference.

This is the trick that I’m not sure Elon Musk has either grasped or, if he has, cares about. One random city cutting a program is going to have a minimal impact on Musk, but if Europe or California decides to exclude Tesla from carbon offset credits that would materially damage the company’s profitability.

And, as Bloomberg’s Amanda Mull points out, the vibes are really bad:

Cybertruck owners have found their vehicles defaced with everything from spray paint to dog feces, and embarrassed drivers of less controversial Tesla models have taken to adding bumper stickers or magnets to their cars to make clear they purchased them before they knew about Musk’s politics. Tesla showrooms and Superchargers have attracted “Tesla Takedown” protests across the US, and a handful of suspected arson incidents of the company’s cars and facilities have also been reported. Sales numbers and registration rates for new Teslas have fallen around the world in 2025: Sales are down 45% across Europe; in Australia, the Electric Vehicle Council estimates a sales drop of 70% over the previous year; in China, shipments of domestically manufactured Teslas have plunged 49%.

It’s nearly impossible to think of a comparable example of a company detonating its own brand. Musk long ago revealed himself to be, at best, a clumsy wielder of symbolism—remember when he hauled a bathroom sink into Twitter’s offices when his takeover became official?—and he appears to have completely misapprehended the symbolic value of Tesla’s brand. Or, at the very least, he seems to have misunderstood his own capacity to change the nature of that value without also diminishing it.

I was listening to Matt Levine on his “Money Stuff” podcast this weekend, and he joked that shorting Tesla wasn’t smart as Musk has always found a way to turn around a bad quarter, so we’ll see what he can do to shift the vibes back.

Mazda Is Going To Get By With A Little Help From Its Friends

Of all Japanese automakers, Mazda has been the slowest to embrace EVs. This has been a decent strategy lately, but even Mazda recognizes it’ll eventually need its own electric cars. After a few years of trying to go it alone, the company has decided to find some partners in what it calls an “asset-light strategy,” which just means it’s not going to build everything itself.

From Nikkei Asia:

Under the strategy, Mazda’s battery development budget for the period from 2022 to 2030 will be reduced by half from the original estimate of 750 billion yen ($5 billion).

Originally, Mazda planned to procure batteries by itself, but the company has found a more efficient way — joint development with Chinese partner Changan Automobile.

Total investment for electrification is now projected to be 1.5 trillion yen through 2030, compared with 2 trillion yen as originally estimated.

Mazda also plans to build its EVs on its existing production lines, as opposed to building a bunch of new factories.

What I’m Listening To While Writing TMD

Does Michel Gondry’s “Army of Me” rolling artwork for Bjork count as one of the all-time great uses of automobiles in music video history? I think so. Peep the Austin Healey.

The Big Question

What would you do if you were in charge of Audi or Mazda?

Top photo: Ford/Depositphotos.com