The US stock market fell for a second day, with the S&P 500 dropping -4.5% after President Donald Trump announced reciprocal tariffs, including a baseline 10% tariff on imports from all countries. The energy sector was severely impacted, with oil prices crashing due to the ongoing oil price crash.
The tariffs are expected to make EV batteries much more expensive, putting pressure on the rapidly growing electric vehicle (EV) market. China is facing a substantial 64.9% tariff, while Japan and South Korea face tariff rates of 24% and 25%, respectively. Experts predict that this will lead to Japan and South Korea capturing a larger share of the EV battery market.
The new tariffs are expected to add $8 billion in costs for battery pack producers and EV makers. While some experts see this as an opportunity for the US to domesticate its battery cell production, it’s unlikely due to retaliatory tariffs and potential disruptions to raw materials.
The impact on the EV industry is significant, with prices potentially soaring above $10,000 for a standard EV battery pack. This could slow down the adoption of EVs in the US, where many consumers are price-sensitive and hesitant to adopt new technology.
Furthermore, Trump has revoked the EV mandate, effectively killing the $7,500 EV tax credit for buyers. This move is expected to have a significant impact on the US EV market, which was previously driven by government incentives. The US EV industry is now facing a reset, with Tesla’s sales decline being a major indicator of this trend.
Source: https://oilprice.com/Energy/Energy-General/EV-Battery-Costs-Set-For-Sharp-Rise-On-Trumps-Tariffs.html