Sept. 4, 2025 | Sales fall for three Japanese automakers; state of trade talks with Canada

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Welcome to Daily Drive for Thursday, September 4th, 2025. I'm Kellen Walker in Las Vegas.

Today on the show, three Japanese automakers see U.S. sales fall in August.

Cadillac cuts back EV production, at least temporarily,

and dealers are feeling gloomier than ever about EV markets. Plus, automotive news

Canada's Greg Lason joins the show to give an update on how auto companies north of the border

are doing amid tariffs and on trade talks starting up again after about a month of silence.

It appears they're back on speaking terms. It appears to be one-on-one,

and we have sent some politicians to Washington to sort this out.

Let's run through all the news you need to know to keep up in the auto industry.

We had some positive U.S. sales news to report on yesterday's show,

but the automakers reporting since then haven't fared as well. In August, Honda says U.S. sales

fell more than 5%. That's despite major gains for the Passport midsize crossover

and prologue electric crossover. Deliveries also fell for Subaru. They were down almost

3%. An import-reliant Mazda said U.S. deliveries fell more than 7.5% during the month.

Overall, U.S. light vehicle sales are expected to rise between 1.3% and 4.4% in August.

That's based on forecasts from JD Power and Global Data, S&P Global Mobility, and Cox Automotive.

General Motors is cutting output at one of its main electric vehicle factories.

GM will stop production of two electric Cadillac crossovers at its assembly plant in Spring Hill,

Tennessee during the month of December. That's according to a communication from GM to employees

that was seen by Reuters. The plant produces the midsize Cadillac Lyric and the three-row Vistik.

And dealerships are showing a record level of pessimism about the future of EVs.

In the third quarter, Cox Automotive dealer sentiment index poll, franchise dealers gave the

upcoming market a 33 on Cox's 100-point index scale. That's the lowest EV outlook since Cox began

asking the question in the second quarter of 2021. Independent dealers rated the EV market

three months out a 28, also a record low. Cox says both third-quarter results were significantly

lower than dealers' outlooks a year earlier. And those are today's headlines. You can find more

details on all those stories at AutoNews.com. Joining me now to talk more about Cox Automotive's

dealer sentiment poll is our own John Hutter. John, welcome back to Daily Drive.

Hey, great to be here.

So John, why are dealers so gloomy about the future of the EV market?

Yeah, it's pretty funny. Cox Automotive dealer sentiment index found just, you know,

dismal outlooks for EVs coming out of the dealerships. And really the issue is Cox's conclusion,

and this seems accurate, is that they know that the EV tax credits are going to end

after September 30th. And so I guess they're just terrified that's going to be the end of

kind of any EV demand. And how are dealers feeling about the overall new car market,

including ICE vehicles and hybrids?

You know, it's interesting. The overall market, they're actually kind of

feeling about, showing them about the same level. It's kind of mildly positive.

But you know, what's interesting is that it's the same, kind of around the same results

as during the second quarter Cox polling, which happened during a time when just vehicle

sales were like, you know, they're just flying off the lot because everyone was trying to get,

your consumers were afraid prices were going to go up because of tariffs and we're trying to buy

them in advance of that. But there wasn't really a significant drop off between the second and third

quarter. So that's good. I mean, for obviously the industry seems, you know, pretty happy with

things right now. Gotcha. Good stuff, John. Thank you so much for joining me.

Yeah, no worries. Coming up, we'll get an update about how the auto industry is faring

north of the border from automotive news Canada's Greg Lason. That's next on daily drive.

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Welcome back to daily drive. I'm Kellan Walker. There's been a lot of news from Canada in recent

weeks. That is, except when it comes to trade talks between Ottawa and Washington DC,

which have been pretty much silent since last month. Greg Lason is the digital and

mobile editor at Automotive News Canada, and he hosts the Automotive News Canada podcast,

available every Friday. Greg spoke with our own Jake Neer about how Canadian auto companies are

doing amid tariffs and where trade talks stand right now. Greg Lason, welcome back to daily

drive. Thanks for having me. Good to be here. Always a good time to check in on our northern

neighbors or if you're here in Metro Detroit, our southern neighbors across the river here.

You know, it's been a really interesting year so far, obviously, when it comes to the United

States relationship with Canada and the auto industries. How have Canadian auto companies

been faring amid tariffs so far this year? You know, it's odd. I would say they're faring

okay. You know, the odd fact in all of this is the tariffs arrived when Ford Oakville and

Stellantis Brampton were both down for retooling. Windsor, Stellantis plant there,

up and down for retooling, changing things out in terms of electric vehicles versus internal combustion

engines for their muscle car line. And I think what a lot of the general public forgets or maybe

doesn't even know, but our audience, because they're in the industry does, is that this 25%

tariff really only affects about, and I'm ballparking now, about half the parts content

inside vehicles assembled in Canada and then shipped to the United States. So it's

not as big a financial hit as that big scary 25% number seems, but by no means does this

not increase the cost of doing business because it does. But in terms of shipments of assembled vehicles,

I mean, they're still happening. They're affected a little, but they're affected by

other factors, that retooling for example, the price for example, inflation, a rush early to

beat tariffs. So we're still working our way through this. It seems like you and I've been

covering tariffs now for five years, but it's only been about five months, right? So to put it

in perspective, I would still say things are okay, but look, nobody, not the parts industry,

not the automakers want any tariffs. That's why the USMCA exists. I mean, they put it in

place because we're so integrated, because each country does its own thing. What I think

many people don't know is that what we build in Ontario are really popular vehicles in America,

and there are reasons that it's done in Canada. We have lower labor costs. We have the advantage

of a fluctuating dollar. We have universal healthcare. We have quality factories for

a number of plants. So when you add all of that up, I don't see it going away anytime

soon, because there's a reason the automakers build the Civic here, the Minivan here,

all of these vehicles that are popular in the United States.

We had predictions that the North American auto industry could screech to a halt with tariffs,

especially when it comes to the idea that parts are crossing over the... I mean,

you and I both live close to the Detroit border with Windsor, and you see the trucks

going across the Ambassador Bridge all the time. They're carrying parts back and forth and back and

forth, and that dynamic had a lot of people saying, how is this sustainable for more than a

week or so? We haven't seen the industry shut down and manufacturing shut down that way. Why is

that? I would say President Donald Trump either came to his senses or listened to the right

people. The reason it didn't happen is because he did not implement tariffs on standalone auto

parts. If you build a widget in, I don't know, London, Ontario, and that widget is used in a

Minivan built in Windsor, it's tariffed because it is within that vehicle, and those parts

are tariffed because it's non-US content. But if that widget built in London complies

with the United States-Canada-Mexico agreement, then it is not tariffed as it crosses the border.

So all of these thousands of parts that cross the border have not been affected by tariffs

as long as they comply with the USMCA. And so that is why we haven't seen it screech to a halt,

because all of the... Call it 50% again. Let's say 50% of the parts used in a vehicle

built in Metro Detroit come from Canada, and all of those parts are compliant. And I've checked,

the Auto Parts Manufacturers Association in Canada says it can't find any of its members

that make non-compliant parts. So everything we make is compliant with that free trade agreement,

therefore they avoid tariffs, therefore the auto industry did not shut down.

So what about the status of negotiations right now? We've seen the EU, we've seen other

countries able to strike at least framework agreements with the Trump administration,

but not much news out of Canada it seems like. No, I like that you use the word framework,

because I'm always asking, show me the ink dried on the document. I don't see a lot of that right

now. In terms of what Canada is doing, Prime Minister Mark Carney and Donald Trump just this

week quietly spoke, had a long conversation. Now, Carney wouldn't say which sectors were discussed,

but he did say they spoke at length. He said it was a good conversation. We sent a delegation

to Washington last week to go talk about trade, but Carney did say that small tariffs

in terms of value, so a small percentage of a tariff were discussed. And I think we're

heading toward a world in which tariffs will exist, but they'll be smaller than that 25%

number that we have been hearing about. Carney was quick to note that the tariffs that Canada

currently pays, they're actually smaller than most other countries face right now. So

they're progressing, but they're progressing slowly. It appears that they've taken a one-on-one

turn between Carney and Trump. At one point, I had more than one lobbyist and executive tell

me that Carney had just severed ties with the president after an August 1st deadline. So they

went about a month without speaking, but it appears they're back on speaking terms. It appears to be

one-on-one. And we have sent some politicians to Washington to sort this out, but as I've been

saying, as I've followed this and through the folks I've talked to, I still think we're in

for a period of tariffs until the USMCA is renegotiated.

Exactly. That's what I was going to ask next is that it seemed like there might be a chance,

and I learned this from you, Greg. So I'm not going to take any credit for this,

but the strategy might be that, look, if we're not making any progress here,

let's just wait until USMCA is renegotiated. But it sounds like that is less likely than

getting something done in the interim. Is that fair to say?

Yeah. I don't think anyone in Canada wants to agree to anything knowing that essentially

January 1st, you can start renegotiating the USMCA. We know that the country's moved up by a month

the letter of intent to renegotiate. So rather than October when they were supposed to sign it,

I believe they signed it in September or about to. And so the process is moving along more

quickly, and they're not rushing, but getting to it quicker than they need to. And I started

hearing these rumblings probably late July that Canada was essentially kicking all tariffs and

all talks down the road until they officially opened the USMCA. And I think that goes back

to my original point in that there are no tariffs on parts that are compliant. There are

only tariffs on the parts that are non-US made in Canadian assembled vehicles.

And so while the financial hit wasn't as big, it still exists. I think it'll still be there

for a while. But the end goal for Canada, I feel, is to wait and just renegotiate USMCA because

there are other things involved now. There are things about keeping America happy when it comes

to Chinese EVs and tariffs on those. There is the fact that we have potential digital

services taxes that the US administration doesn't like. There are other things today

that didn't exist when the original USMCA was written, just as there were things in the original

USMCA that didn't exist back in the 90s when NAFTA didn't exist. So they're continually updating it.

And I think that Canada just sees the better deal is to wait for the final deal rather

than a bunch of small ones along the way. Amid all of this, Lana Payne was recently

reelected president of Unifor up in Canada. Now, what does that say to you about the

union's role in this? It's attitude toward North American trade. She's been pretty critical of

President Trump. And I also know that the meeting happened behind closed doors, it sounds like.

So maybe we don't know all the details about what was debated or who else was running.

But what do you get from that news that Lana Payne will serve another term?

Lana Payne's in a different position than her predecessors when in terms of

auto, right? She doesn't come from auto. She's a former newspaper columnist. She was in the

fisheries industry. And then when Unifor merged with the CAW merged with the paper workers,

it became this giant private sector union, the biggest in Canada encompassing all kinds

of industries. And auto just happens to be one of them. And I think Lana Payne is fighting not just

for auto jobs, but all manufacturing jobs, all retail jobs that they represent during a trade

war. And so what I think her reelection shows is that she's done a really good job. If you

believe Unifor and I see no reason not to, they say she won in the landslide. She has been

front and center. She's an automotive news Canada all star for her work in fighting and

dealing with this trade war. I think it sends a message that she is the person that this union,

that is not only auto, wants representing them. She is ruthless and relentless in her public

appearances and on social media. She is not afraid to call out the president on what she thinks

are wrongs and inappropriate tariffs. And I think she's got the auto workers behind her,

which when she was initially elected might have been a concern, but I don't think that's a

concern anymore. All right, Greg, before I let you go, I could not pass up the opportunity to talk

with you and about a story that you wrote recently, which may be the most Canadian story I've read

since I've been here at Automotive News. Flow and Tim Hortons are partnering on EV Charger

locations. Like I said, this is a great story just for how Canadian is, but there's

some implications here. There's strategy here. There is an attitude toward how to go about making

owning an EV more convenient and also how businesses might take advantage of demand for charging.

Yeah, when this story came across my desk, I thought, one, how Canadian it is. That is

biggest coffee shop chain that was founded by a hockey player, installing electric vehicle

chargers made in Quebec where we have the highest EV uptake. I mean, it was just everything about it

was Canadian. And then my second thought was, well, it's about time. Doesn't this just make

sense on every single level, whether it's marketing or whether it's EV adoption or whether it's

ease of charging? This is something that I can't believe took this long. They're going to install

100 stations, which is about 400 ports across 10 provinces by 2028. And to just give you

a sense, I mean, this coffee chain serves millions of cups of coffee every day. The number of people

who have a Tim Hortons coffee at least once a month are staggering. So it only makes sense that if

you're an EV driver, you plug in, you go get your coffee. I still see people reading newspapers

at my local Tim Hortons. So you know people are going in. This will help Canada, which has

a strict zero emissions vehicle sales mandate still in place. 100% of sales need to be EVs

by 2035. And the biggest complaint by every JD power study, every government survey,

is that there aren't enough charging stations in Canada. So why wouldn't it make sense

to put chargers at the most popular coffee shop that you find on as many corners as you do gas

stations? It's funny, Greg, because it reminds me of during COVID when they were trying to

figure out the best way to distribute vaccines for COVID. And there was talk of in some actual

partnerships with Dollar General because everyone in the United States or at least in the contiguous

of the United States lives a certain distance away from a Dollar General location. Seems like

a similar strategy. It's like if we want to partner with a business and make this ubiquitous,

you know, what's already ubiquitous? What places can we partner with that are, you know,

that are out there that could also benefit from having people coming in and out of their doors?

Yeah, I'll just give you two stats. Five million cups of coffee served every day.

80% of Canadians say they get a Tim Hortons coffee once a month. They are everywhere. And

I'll bring this back to Otto in this sense. An executive that I know from Michigan came

over to a plant in London, Ontario. And the guys on the shop floor said, do you want a coffee?

We're going to Tim's. And he said, no. And those foremen looked at him like he had a third eye.

It was almost insulting to not accept a coffee from Tim Hortons on coffee break

at this part supplier. So I mean, it is just ingrained in the Canadian culture. I know

starting early at Automotive News Canada, I was asked to bring Tim Hortons coffee

to the Automotive News headquarters on Gration in downtown Detroit, because you didn't have as

many over there 10 years ago as you do today. So I'm telling you, it's a marketing match made in heaven.

Greg Lason, thank you so much for joining us today on Daily Drive. Really appreciate the

update on what's going on in Canada. Anytime. Greg Lason is the digital and mobile editor

of our sibling publication, Automotive News Canada. He also hosts the Automotive News

Canada podcast. And you can hear the latest episode of that on Friday. This week's guest

is Subaru Canada carline manager, Brad Evans. That's Daily Drive for today. I'm Kellan Walker.

Thanks to Automotive News journalist John Hutter and David Phillips for their reporting for

today's podcast. You can get the latest news on trade talks, sales results and everything

happening in the auto industry at AutoNews.com. Come back tomorrow for a conversation with

David Frontera, Director of National Compliance at Informative about FNI fraud and how to combat it.

Fraud is now taken on this multiple interconnected forms and every one of them is unique.

We'd love to hear from you. Let us know what you think of the show and the topics we covered

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Sept. 4, 2025 | Sales fall for three Japanese automakers; state of trade talks with Canada

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