Expert: Inflation Continues to Sew Uncertainty in Auto and Auto Repair

The tariffs imposed by President Donald Trump continue to impact automobile companies, which are already facing financial strains due to inflation—a trend that has led to more discussions within in the industry on steps to improve profit, stay afloat or avoid bankruptcy.

Those ideas were at the core of a discussion by PartsTrader’s Chief Industry Relations Officer Greg Horn during a webinar discussing how tariffs are affecting the automotive and auto repair industries.

The webinar on Sept. 24 covered the latest on collision parts inflation and the role of currency exchange rates, early warning signs of a potential auto financing collapse and how new vehicle sales trends are shaping the future of collision repair.

Inflation

The removal of the de minimus exemption brought an end to the duty-free import status for shipments valued under $800 that was enjoyed by the auto parts industry, Horn noted.

“Even if the Supreme Court upheld the ban on most of the tariffs, most of that would affect 53% of goods that are currently tariffed and the ones that apply to us in the automotive world would still stay in place,” Horn said. “If you’re ordering auto parts for example off of Amazon, off of eBay, or Temu, or Alibaba, or if you’re ordering direct from an individual seller of an auto part that is overseas, those are all going to be subject to customs and that additional tariffs.”

Some relief could be in sight. Reports are that Trump is considering significant tariff relief for U.S. auto production, Republican Senator Bernie Moreno and auto officials told Reuters last week.

There has also been an increase in price for recycled auto parts. According to Horn, the weak dollar exchange in which vehicles that remain in the U.S. for recyclable usage is costing sellers more, so they are passing on that same price to the buyers causing an imbalance of pricing.

Financial Constraints

Several auto makers are experiencing financial problems. One company notably struggling is Tesla.

At the end of Q2 of 2025, only 52,000 Cybertrucks vehicles were sold, Horn noted.

“Unfortunately, Elon Musk was ramping up production for these vehicles, and so there are now 10,000 unsold Cybertrucks stockpiled in the Tesla lots and rented in abandoned malls, which represents about $800 million in unsold Cybertrucks inventory,” Horn said.

In early 2024, the company’s share of California electric cars demand fell from 55.5% to 43.9, though there was some indication that Elon Musk’s political activities may have contributed to the decline.

In the broader automotive picture, we already seeing bankruptcy take place in various financial industries that fund automotive sectors.

“What we’re seeing is financing companies of those deep, deep subprime…vehicle owners filing for bankruptcy,” Horn said. “TriColor, who operated nonstandard financing as well as dealer lots in Texas, is the second in under 35 days to declare bankruptcy.”

Maniar is an intern at Wells Media and a student at Cal State University Fullerton working on a bachelors degree in communications. He expects to graduate in December.

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