Charles R. Goulding and Preeti Sulibhavi break down how new tariffs and tech are reshaping the auto supply chain.
With the recent implementation of a 25% tariff on imported automobiles, the U.S. auto industry has surged to the forefront of national discourse. This significant policy shift is poised to reshape manufacturing strategies, supply chains, and consumer pricing within the sector. Amid these changes, advancements in 3D printing technology present a timely opportunity for the industry to adapt and innovate.
The Time for Automotive Part 3D Printing Applications Is Now
The confluence of elevated import tariffs and rapid developments in 3D printing technology underscores the immediate potential for 3D printing in auto parts manufacturing. Original Equipment Manufacturers (OEMs) have long utilized digital software for product design, facilitating seamless replication of components through 3D printing in the replacement market. This approach not only mitigates tariff-induced cost increases but also enhances production flexibility and efficiency.
Leading automotive companies are already integrating 3D printing into their operations. Honda and Hyundai have announced significant plant expansions in the U.S., incorporating advanced 3D printing capabilities to localize production and reduce reliance on imported components. Similarly, Ford, BMW, and Mercedes have been pioneers in adopting 3D printing technology, utilizing it to produce complex parts with reduced weight and improved performance. Cadillac’s recent involvement in Formula 1 has further accelerated its 3D printing expertise, positioning the brand to navigate the new tariff landscape effectively.
3D Systems, a leader in additive manufacturing solutions, highlights several key automotive applications for 3D printing, including:
- Body Interior Trim/Panel: Vehicle cabin interiors, such as those in automobiles, airplanes, and boats, are ideal candidates for 3D printing. These applications often utilize plastic materials, aligning with 3D printing’s strengths in producing intricate and customizable designs.
- Air and Fluid Handling Components: 3D printing enables the production of complex geometries for components like ducts, manifolds, and fluid reservoirs, enhancing performance and reducing assembly requirements.
- Metal Structural Components: Additive manufacturing facilitates the creation of lightweight yet robust structural parts, contributing to overall vehicle weight reduction and improved fuel efficiency.
By embracing 3D printing, automakers can not only circumvent tariff-related cost increases but also drive innovation in design and production processes.
Mercedes-Benz’s Strategic Response to Tariffs
Facing substantial financial impacts from the new tariffs, Mercedes-Benz is evaluating strategic shifts to maintain its competitiveness in the U.S. market. The company is considering relocating the production of higher-end models to its U.S. facilities, a move that would mitigate tariff costs and align with the brand’s commitment to local manufacturing. Conversely, Mercedes is contemplating the discontinuation of certain entry-level models in the U.S., as the tariffs render these vehicles less economically viable for both the manufacturer and consumers. These potential adjustments underscore the profound influence of trade policies on product offerings and manufacturing footprints.
The Ripple Effect of New U.S. Manufacturing Plants
The establishment of new manufacturing plants by Honda, Hyundai, and other automakers in the U.S. carries significant implications beyond the immediate expansion of production capacity. Historically, such developments have attracted foreign suppliers to establish local operations, closely following their OEM customers. This trend fosters the creation of robust domestic supply chains, enhances local economies, and reduces logistical complexities. Furthermore, the proximity of suppliers to manufacturing facilities facilitates better collaboration, shorter lead times, and increased responsiveness to market demands. The current wave of plant constructions is likely to perpetuate this pattern, reinforcing the U.S. as a pivotal hub in the global automotive landscape. This will not delay the production of newer models for 2025 and beyond.
The day after the liberation tariff announcement, Stellantis, the parent company of Jeep, Dodge, Chrysler, and Ram pickup trucks, announced it is temporarily closing its plants in Mexico and Canada.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes are typically eligible expenses toward the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software can also be an eligible R&D expense. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit-eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Consumer Implications and Industry Outlook
The imposition of a 25% tariff on imported automobiles is anticipated to have direct consequences for consumers. Industry experts predict that these tariffs could increase car prices by US$10,000 to US$20,000, placing additional financial strain on buyers and potentially dampening demand. In response, companies like Ford are implementing strategies to alleviate the burden on consumers. Ford has extended its employee-pricing plan to all U.S. customers, offering significant discounts to maintain sales momentum amid the tariff-induced price hikes.
The broader economic implications of these tariffs are substantial. Economists warn of rising inflation, with household costs potentially increasing by approximately US$3,800 annually. The auto industry, in particular, faces challenges related to supply chain adjustments, production costs, and market competitiveness. However, the integration of 3D printing technologies offers a pathway to mitigate some of these challenges by enabling localized, efficient, and flexible manufacturing solutions.
As the industry navigates this evolving landscape, the adoption of innovative technologies like 3D printing, strategic realignment of production facilities, and collaborative efforts with suppliers will be critical in adapting to the new economic realities and sustaining growth in the U.S. automotive market.
