Feb. 23, 2026 | Auto industry gets reprieve from new tariffs; AlixPartners' Dan Hearsch
About this episode
The episode covers the auto industry's exemption from President Trump's new 15% global tariff, providing relief to automakers and suppliers. Stellantis faces its first loss due to costly EV strategy write-downs, while dealership networks shift toward more standalone brand stores amid consolidation efforts. Alex Partners' Dan Hirsch discusses why the auto sector remains the most disrupted globally, highlighting challenges like geopolitical tensions, supply chain issues, and cautious AI adoption due to long development cycles and consumer trust concerns. The conversation offers insight into how executives navigate unprecedented industry turbulence.
President Donald Trump issues new 15 percent global tariff but exempts vehicles and auto parts. Stellantis prepares to report its first annual loss driven by €22 billion ($25.9 billon) in write-downs. Plus, AlixPartners’ Dan Hearsch explains why the auto industry ranks as the world’s most disrupted sector.
tariff
"Today on the show, Trump's new tariff has a key carve-out for the auto industry."
A tariff is a tax that a country puts on things coming from other countries, like cars. This can make those cars more expensive to buy.
A tariff is a tax imposed by a government on imported goods, which can affect the price and competitiveness of products like cars in the domestic market.
dealership franchise consolidation
"a surprising trend in dealership franchise consolidation."
Dealership franchise consolidation means that smaller car dealerships are joining together or being bought by bigger companies, so there are fewer separate places to buy cars.
Dealership franchise consolidation refers to the trend where automotive dealerships are being merged or acquired, reducing the number of independent dealerships and often leading to larger dealership groups.
automotive development cycle
"It really emphasizes how different the automotive development cycle is than other consumer goods,"
The automotive development cycle is how long it takes to make a new car, from the first idea to when you can buy it. It usually takes a lot longer than making other things.
The automotive development cycle is the process and timeline car manufacturers follow to design, engineer, test, and launch new vehicles, which is typically much longer and more complex than for other consumer products.
import taxes
"President Trump has issued a new 15% global tariff after the Supreme Court ruled many of its previous import taxes are illegal."
Import taxes are extra costs added when things are bought from other countries, making them more expensive.
Import taxes are duties charged on goods brought into a country from abroad, affecting the cost and pricing of those goods.
copper
"Vehicles, parts, steel, aluminum, and copper are exempt."
Copper is a metal used in cars to help electricity flow through wires.
Copper is a metal used in cars mainly for electrical wiring and components due to its excellent conductivity.
steel
"Vehicles, parts, steel, aluminum, and copper are exempt."
Steel is a type of metal used to make cars strong and safe.
Steel is a strong metal alloy commonly used in vehicle manufacturing for the body, frame, and many structural components.
aluminum
"Vehicles, parts, steel, aluminum, and copper are exempt."
Aluminum is a light metal that helps make cars lighter and use less fuel.
Aluminum is a lightweight metal used in cars to reduce weight and improve fuel efficiency, often found in body panels and engine parts.
automakers
"The exemption is a relief for automakers and suppliers who lobby to maintain the status quo."
Automakers are companies that make cars and trucks.
Automakers are companies that design, manufacture, and sell motor vehicles.
suppliers
"The exemption is a relief for automakers and suppliers who lobby to maintain the status quo."
Suppliers are businesses that make parts used to build cars.
Suppliers are companies that provide parts and materials to automakers for vehicle production.
Stellantis
"Stellantis is about to report its first annual loss since its 2021 formation."
Stellantis is a big car company made when two big car companies joined together. They make lots of different cars under different brand names.
Stellantis is a multinational automotive manufacturing corporation formed in 2021 from the merger of Fiat Chrysler Automobiles and PSA Group. It owns multiple car brands including Jeep, Ram, Peugeot, and others.
write downs
"The result is driven by a staggering 22 billion euros in write downs."
Write downs mean a company says some things it owns are worth less money than before, so they lower the value in their records.
Write downs are accounting charges that reduce the value of assets on a company's balance sheet, often reflecting losses or reduced future profitability.
EV strategy
"The automaker says those charges stem from an overly ambitious EV strategy under former CEO Carlos Tavares."
EV strategy means how a car company plans to make and sell electric cars.
An EV strategy refers to a company's plan and approach for developing and selling electric vehicles, including product development, supply chain, and market positioning.
Ram 1500 BEV
"They include canceled electric models like the Ram 1500 BEV, scaled back EV supply chains,"
The Ram 1500 BEV was going to be an electric pickup truck, but the company stopped making it.
The Ram 1500 BEV was a planned battery electric version of Ram's popular 1500 pickup truck, which was canceled as part of Stellantis's revised electric vehicle plans.
EV supply chains
"They include canceled electric models like the Ram 1500 BEV, scaled back EV supply chains,"
EV supply chains are all the parts and materials needed to build electric cars and how they get to the factory.
EV supply chains refer to the network of suppliers and logistics involved in producing electric vehicle components, such as batteries and electric motors.
warranty costs
"and higher warranty costs."
Warranty costs are the money a company spends fixing things that break while still covered by their guarantee.
Warranty costs are expenses a company incurs to repair or replace products under warranty, reflecting product reliability and quality issues.
network consolidation
"Lincoln dropped 43 dealers as it continues network consolidation, and Jaguar fell below 100 stores during its transition to ultraluxury."
Network consolidation means car companies are working with fewer dealerships to make things simpler and better for customers and themselves.
Network consolidation refers to automakers reducing the number of dealerships or franchises they work with to improve efficiency, reduce costs, and strengthen brand control over sales and service.
buyout program
"Buick lost 180 stores as its buyout program wrapped up."
A buyout program is when a car company pays some dealers to stop selling their cars so the company can focus on fewer stores.
A buyout program is when an automaker offers financial incentives to dealerships to voluntarily close or leave the brand's sales network, often to streamline operations or improve profitability.
Buick
"Buick lost 180 stores as its buyout program wrapped up."
Buick is a car brand that makes nicer cars than regular ones but not as fancy as luxury cars.
Buick is an American automobile brand owned by General Motors, known for producing premium vehicles that sit between mainstream and luxury segments.
Lincoln
"Lincoln dropped 43 dealers as it continues network consolidation, and Jaguar fell below 100 stores during its transition to ultraluxury."
Lincoln is a car brand that makes fancy cars and SUVs with lots of nice features.
Lincoln is the luxury vehicle division of Ford Motor Company, focusing on upscale cars and SUVs with premium features and design.
ultraluxury
"Jaguar fell below 100 stores during its transition to ultraluxury."
Ultraluxury means very fancy and expensive cars that are made to be the best and most special.
Ultraluxury refers to the highest tier of luxury vehicles and brands, offering premium features, exclusivity, and high price points, often competing with brands like Rolls-Royce and Bentley.
Jaguar
"Jaguar fell below 100 stores during its transition to ultraluxury."
Jaguar is a car brand that makes fancy and fast cars, and they are trying to make even more expensive and special cars now.
Jaguar is a British luxury car manufacturer known for stylish, performance-oriented sedans and SUVs, now focusing on moving upmarket into ultraluxury segments.
standalone stores
"So John, what's driving the shift toward more standalone stores? There's kind of two things going on. One is ongoing work, particularly by Buick... So as those Buick stores leave what had been a shared space, you see more standalone GMC stores..."
Standalone stores are car dealerships that only sell one kind of car brand instead of many brands in the same place.
Standalone stores refer to dealerships dedicated to a single brand, rather than sharing space with other brands. This approach allows for a focused brand experience and often aligns with strategic shifts like electrification.
all-electric plan
"One is ongoing work, particularly by Buick, which is doing offering basically buyouts to dealers who don't want to go to kind of its all electric plan for the future."
An all-electric plan means the car company wants to make only cars that run on electricity instead of gas or diesel.
An all-electric plan refers to a manufacturer's strategy to transition their vehicle lineup entirely to electric vehicles, eliminating internal combustion engines over time.
GMC
"So as those Buick stores leave what had been a shared space, you see more standalone GMC stores, but what a bit of Buick GMC is now just a GMC by itself."
GMC is a car company that makes trucks and SUVs, and sometimes shares stores with Buick but is now having its own separate stores.
GMC is a division of General Motors that specializes in trucks, SUVs, and commercial vehicles. It often shares dealership space with Buick but is increasingly operating standalone stores.
Hyundai Genesis
"...n the other brand to kind of watch there would be Genesis. They're actively pushing for dealers to have, y..."
The Hyundai Genesis is a fancy car made by Hyundai that tries to compete with more expensive luxury cars. It has lots of nice features and is designed to be comfortable and powerful. People talk about it because Hyundai is trying hard to sell more of these cars through their dealers.
The Hyundai Genesis is a luxury sedan that marked Hyundai's entry into the premium car market, later evolving into its own luxury brand called Genesis. It's significant for offering high-end features and performance at a competitive price point, making it a notable contender against established luxury brands. The discussion likely centers on Genesis's growing presence and dealer strategies to expand its market share.
software defined vehicle
"as the shift in technology toward the software defined vehicle, the introduction of autonomy and ADAS features."
A software defined vehicle is a car that can get new features and fixes through software updates, like your phone does, instead of needing new parts.
A software defined vehicle is a car whose features and functions are largely controlled and updated through software, allowing for improvements and new capabilities without hardware changes.
autonomy
"the introduction of autonomy and ADAS features."
Autonomy means the car can drive itself or help the driver by doing some driving tasks automatically.
Autonomy in vehicles refers to self-driving or driver-assist technologies that allow a car to operate with little or no human input.
ADAS features
"the introduction of autonomy and ADAS features."
ADAS features are helpful car technologies that assist the driver, like automatic braking or keeping the car in its lane.
ADAS stands for Advanced Driver Assistance Systems, which are technologies designed to help drivers with tasks like braking, lane keeping, and parking to improve safety.
global supply chain disruption
"More recently, the significant disruption of the global supply chain, geopolitical tensions and everything that's come along with that have really put a lot of pressure on automotive industry executives,"
Global supply chain disruption means problems getting the parts needed to build cars because of issues around the world.
Global supply chain disruption refers to interruptions in the worldwide flow of parts and materials needed to manufacture vehicles, often causing delays and shortages.
OEMs
"pressure on automotive industry executives, both with the OEMs and the tier one suppliers."
OEMs are the big car companies that make cars, like Ford or Toyota.
OEMs stands for Original Equipment Manufacturers, which are companies that produce vehicles or vehicle components under their own brand names.
artificial intelligence (AI) in vehicles
"okay, why aren't auto companies embedding AI in their vehicles? The fact is there's some of that, but there's also real trust issue that a lot of consumers have with artificial intelligence, both the accuracy of some analysis, but also handing over control of certain aspects of the vehicle."
Artificial intelligence means computers inside cars that can help drive or make decisions. Some cars use this to help drivers or keep the car working well.
Artificial intelligence in vehicles refers to the use of computer systems that can perform tasks such as analyzing data, making decisions, or controlling vehicle functions autonomously or semi-autonomously. This technology is increasingly integrated into modern cars for features like driver assistance and predictive maintenance.
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