CCC: How tariffs are reshaping the auto industry

Tariffs, economic pressures and evolving vehicle technology challenges are reshaping auto repair economics, according to CCC Intelligent Solutions' Crash Course: Q3 2025 report. CCC data shows that average component prices, which were flat from 2022 to 2023, rose more than 4% year-over-year in March and April 2025. Average repair costs increased 3.8% year-over-year, and 1.4% in the first half of 2025 versus the year 2024."Today's auto industry is navigating unprecedented economic turbulence – from pricing pressures to sourcing challenges to household financial strain," said Kyle Krumlauf, director of industry analytics at CCC and co-author of Crash Course, in the news release. "These forces are converging in ways that represent not just cyclical pressures, but a structural shift. Our Q3 report provides context and clarity to help insurers, repairers and OEMs better understand these dynamics and adapt their strategies in a more complex and unpredictable environment."

Electric vehicles (EVs) currently face lower-than-expected consumer demand and supply chain, according to the CCC report, especially with the end of the EV tax credit of up to $7,500 from the passage of President Donald Trump's 2025 tax reform. The tax credit expires for EVs purchased or leased after September 30, 2025. 

The report notes that recent trade policies have introduced complexity to the global supply chain and significantly impacted manufacturing. This includes the new 25% tariffs on imported vehicles and 50% tariffs on steel and aluminum, as well as the requirement for 85% of vehicle content to be sourced from the United States to qualify for exemption.

The Center for Automotive Research (CAR) estimates that tariffs could drive costs for domestic automakers by $107.7 billion, the report shares. Original equipment manufacturers (OEMs) must now reassess their business model, according to CCC, as the origin of a component matters significantly. Analysts expect that dozens of vehicle models will have to be re-engineered over the next 12 to 18 months in order to meet the 85% domestic component requirement.

According to CCC's Crash Course, the current status of the auto industry is a prime "redesign moment." The report shares that across the industry, automakers are reassessing production strategies and vehicle production to meet tariff requirements, as well as reevaluating the shift in consumer demand for EVs or hybrid vehicles. This also includes investing in AI technology and digitizing supply chain management, according to CCC, which writes that automakers are "expanding collaboration with insurers and repairers through greater data sharing – from vehicle build sheets to calibration requirements – making downstream workflows more efficient and safer."

Carriers are also digitizing and modernizing claims processes to meet the increase in claims, repair or loss severity and consumer financial strain.

The information provided in Crash Course reports is based on data from 300 million claims-related transactions and millions of bodily injury and personal injury protection (PIP) or medical payments casualty claims processed by customers of CCC's solutions.