Trump's tariff to push up car making costs, says Lucid boss

LOS ANGELES: The head of Lucid Group Inc. warned that President Donald Trump's tariffs will drive up costs to build automobiles - even in the US.

The industry's global supply chain means domestic manufacturers still have to import raw materials and some parts from other countries, interim Chief Executive Officer Marc Winterhoff said in an interview with Bloomberg Television on Monday.

"For the American consumers, vehicles are going to be more expensive under the tariff regime. There's no other way around it," Winterhoff said.

"There's a reason the supply chain is so global."

The Newark, California-based manufacturer of electric vehicles is looking for ways to reduce costs by localizing more of its supply chain, in particular the raw materials for lithium-ion batteries.

Lucid signed a deal in June with Graphite One Inc to boost its supply of US-processed graphite, a key battery component.

Lucid has partnered with Japanese electronic maker Panasonic Holdings Corp since 2022 to supply its batteries, including 2170 cells, which are commonly used in EVs.

The economics of that partnership made sense pre-tariffs, Winterhoff said, because of advanced manufacturing production credits that helped defray costs.

Now, the automaker is working with Panasonic to find ways to source more of the cell supply's raw materials in the US, Winterhoff said from Panasonic's newest US battery plant in De Soto, Kansas.

However, Lucid will not use cells made in the new facility in vehicles until next year.

"I still have to say, and I hope Panasonic hears that, there is some room for improvement," Winterhoff said, "but also right now with the tariffs, this is a very good move for us."