3 Auto Stocks To Consider As Tariff Troubles Play Out

Ongoing tariff battles have taken a toll on the auto industry’s mainstays, with losses reaching $11.7 billion through the first half of 2025, according to industry figures.

Toyota TM is a prime example, with the Japanese auto giant reporting operating income losses of $3 billion in its most recent financial reporting period. Volkswagen VWAGY and GM GM also landed in the billion-dollar loss club, with the former losing $1.52 billion and the latter shedding $1.1 billion in the quarter ending June 30, 2025.

The carnage may not be over yet, industry leaders say, with more losses bound to emerge in future quarters.

However, the industry is quickly adapting, and market experts say these three automakers should prosper in the current industry environment, once tariff issues are settled.

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“The cost of tariffs increased around $300 million, with approximately two-thirds of that impact in automotive and less in energy. However, given the latency in manufacturing and sales, the full impacts will come through in the following quarters,” Tesla TSLA CFO Vaibhav Taneja noted in a late June earnings call.

Trade troubles have not only decimated auto industry earnings, they’ve also put a big dent in how they conduct business.

“Global tariffs, especially between the U.S., China, and the EU, are reshaping automotive supply chains and compressing margins,” said Michael Kodari, CEO at KOSEC Securities. “EVs and components like batteries and semiconductors are at the center, driving up input costs and regulatory complexity. Many automakers are responding by onshoring production to reduce exposure.”

Tariffs have caused additional problems for the auto industry in 2025, industry experts say.

“Automakers have had to pay more for car parts and vehicles because of the tariffs,” said Patrick Peterson, an auto analyst at Goodcar.com. “U.S. companies like Ford and GM have faced huge extra costs, and this means that car prices have gone up for customers. In Japan, Toyota has had to lower its profit predictions because of the tariffs.”

To deal with the tariff terrors, car companies are moving more production to the U.S. or Europe to avoid tariffs. 

“But this isn’t easy,” Peterson said. “It takes time and money to set up new factories or change old ones. This means automakers are facing extra costs in trying to adapt to the new situation.”

With the auto industry in the garage for repairs, three sector stocks should shine as the dust settles on the trade war between the U.S. and foreign economies that have historically stood tall in the auto sector, such as China, Japan, India and South Korea. 

Toyota Motor Corp.

Year-to-date performance: -3.19%

In a challenging tariff-dominated climate, Kodari advises shifting to companies with geographic flexibility, strong margins, and defensive balance sheets. Toyota fits that bill. 

The company has demonstrated resilience through diversified production and stronger regional supply chains. Despite the Q2 earnings woes, “Toyota’s hybrid leadership and operational discipline remain key strengths.”

Additionally, Toyota has taken the tariff issue head-on, with the automaker boosting prices on certain vehicles sold in the United States by more than $200 last month. As Benzinga reported, some models under the Toyota and Lexus brands will see price increases averaging $270 and $208.

While the stock is down 3% year-to-date, shares have rebounded by over 10% in the past month. Toss a 2.87% dividend yield into the mix and Toyota stands at the front of the assembly line for attractive automaker stocks right now.

General Motors

Year-to-date performance: -0.73%

General Motors is another industry rebounder, returning 13% over the past three months after substandard share performance earlier in 2025. With some wind in its sails, GM should be another solid automaker portfolio option as it expands its operations

“GM’s been hurt by tariffs, but it’s making big changes, especially by focusing more on electric cars,” Peterson noted. “If they can continue making these changes, they could see big growth in the future.”

As a major US-based automaker, GM should also benefit from more favorable tariff terms for U.S. companies. Its financials look promising, too.

“I like General Motors because of its US manufacturing base, flexibility to re-route sourcing, stable financials, and reasonable valuation (at 8 times P/E),” said Paul Holmes, financial markets analyst at Brokerlistings.com.

The company’s EV operation is gaining traction, with July sales rising significantly, especially with GM’s Chevrolet Equinox EV. GM sold 19,000 electric vehicles in July in the U.S., as Benzinga reported. That figure is up more than 115% year-over-year, with the Equinox EV stacking 8,500 units. The company noted the July numbers marked the best sales month ever in the U.S. for the Equinox EV. It is also the best month ever for a non-Tesla EV in the U.S. market.

BYD

Year-to-date performance: 24.92%

Founded in 1995 with headquarters in Shenzhen, China and downtown Los Angeles, BYD is another viable option for auto investors seeking to diversify and expand their portfolios globally.

“BYD is a leader in electric cars, and it’s doing very well in the global market,” Peterson said. “Although they’re not as well-known in the U.S., their growth in China and other countries is impressive.”

A case in point. Chinese EVs captured 10.6% of Europe’s total EV market share in June, despite tariffs imposed by the European Union last year, Benzinga reported. BYD saw a 132% increase in EV sales. This trend is expected to continue with the company’s luxury subsidiary, Yangwang, as well as Denza, which is anticipated to debut in Europe in 2026.

Consensus analyst opinion has a $28.7 target price, which is over twice its current share price of $14.

Here’s Some Advice For Investors Looking For A Good Auto Stock

Balancing auto stocks across different channels is highly advisable, according to sector experts.

“If you’re investing in the car industry, it’s a good idea to mix different types of companies in your portfolio.” Peterson said.”Focus on companies that are strong in electric cars, like Tesla and BYD, but also look at traditional car companies like GM that are changing to meet new market needs.”

Additionally, be aware of how tariffs and trade regulations may impact your investments. “It’s important to follow the latest news on tariffs and car sales because they can affect company profits,” Peterson noted.

Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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