US President Donald Trump ended the transatlantic tariff truce on May 1 by raising import tariffs on EU-made vehicles and auto parts from 15% back to 25%, with the new rate taking effect on May 4. The abrupt reversal is widening pressure on European automakers already losing ground in China, leaving them squeezed on two fronts.

US President Donald Trump's decision to raise tariffs on European automobiles and parts to 25% is compounding the US car market in the first quarter of 2026, where the absence of subsidies and purchase discounts, and weak purchasing power, are deepening market imbalance. The key variable remains American consumers' real buying power.

Automakers are repositioning advanced driver assistance systems away from optional equipment and toward recurring revenue sources, with a focus on Level 2 and Level 2+ capabilities that can be monetized through feature tiers and subscriptions. These systems are expected to become a central commercial pillar for smart vehicles over the next decade.

Onsemi told investors during its first-quarter 2026 earnings call, held on May 4, that China remains a key growth market for its automotive power products, even as China's passenger vehicle market softened. The company reported that "Our China automotive revenue grew year-over-year in the first quarter, despite a decline in the China passenger vehicle market of 6% for the same period," framing the performance as evidence of rising semiconductor content and share gains within Chinese electric vehicle programs.

During an earnings call on May 4, Onsemi portrayed its artificial intelligence data center business and new Treo platform as central to a recovery that began in the first quarter, saying improving order patterns and product ramps are translating into higher revenue, expanding gross margins, and stronger cash returns to shareholders.

Onsemi reported a mixed but generally improving set of first-quarter 2026 results, signaling early signs of recovery in key end markets while highlighting ongoing volatility in profitability.

Silicon Motion Technology reported a record quarterly revenue of US$342 million in the first quarter of 2026, up 23% from the previous quarter and soaring 105% year-over-year. The company posted a gross margin of 47.2%, net income after tax of US$53.9 million, and diluted earnings per American depository share (ADS) of US$1.58. CEO Wallace Kou said that ongoing ramp-ups of new projects and market share gains will drive quarterly revenue growth throughout 2026.

Smart Eye's new contracts to add advanced in-cabin sensing to existing models signal a shift with global implications: automakers face looming EU and Euro NCAP rules that push cabin AI beyond driver monitoring toward full multi-passenger perception, affecting safety compliance, software strategies, and privacy for vehicle owners worldwide and regulators.

Onsemi's expanded collaboration with NIO to support the automaker's move to 900V electric vehicle platforms could accelerate global EV adoption by improving range, charging speed, and drivetrain efficiency, influencing vehicle performance and manufacturing scalability for new models introduced worldwide, including those scheduled to debut at the 2026 Beijing Auto Show.

Recent financial reports from leading European and American IDM companies, Texas Instruments (TI) and NXP Semiconductors, reveal that although growth in automotive chips remains modest, the continued increase is notable given the overall global automotive market downturn. Industry insiders note that the rising semiconductor content in vehicles is accelerating fast enough to offset weak vehicle sales, supporting a positive outlook for automotive chips.

Nissan Motor's three-year Re:Nissan plan is beginning to show results, forecasting operating profit for fiscal 2026 despite falling sales. For international stakeholders, this signals that currency moves, regulatory shifts, and aggressive cost cuts can restore profitability even as restructuring costs and market declines reshape alliance and production strategies worldwide.