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Subaru shoulders it all at New York Auto Show: New product, EV rules, tariffs
Posted by Talbot Payne on April 18, 2025
New York — At Subaru Corp.’s 2025 New York International Auto Show stand it’s everything everywhere all at once.
The all-wheel-drive adventure brand is juggling a display-full of challenges that reflect an auto market whipsawed by consumer tastes, government electric vehicle regulations and import tariffs. Subaru debuted an all-new, sixth-generation model of its iconic Outback station wagon this week boasting its most significant design changes in years as buyers flee cars and flock to SUVs. At the same time, Subaru unveiled two electric SUVs key to satisfy looming, 2026 electric vehicle mandates — vehicles that Subaru produces in Japan and that may be subject to import tariffs.
Still bullish on auto shows that many industry brands have fled, Subaru’s lush stand evokes a national park and is at the center of the New York show floor. Live plants, bird sounds, trees, the works.
The Subaru display at the 2025 New York Auto Show looks like a national park with its trees, live plants, and bird sounds. The Trailseeker (left) and Solterra EVs are menat to appeal to green custmers – and to meet steep government mandates. Henry Payne, The Detroit News
Walk through the forest and the 2026 Outback anchors the main stage. It’s been the buzz of media week, and everyone has an opinion about the crossover’s chunky, bold new look.
Introduced as a station wagon in 1995 to complement the Japanese company’s midsize Legacy sedan, Outback became the face of the brand’s appeal as a rugged, nature-loving, get-away-from-it-all vehicle.
Its importance to Subaru can’t be understated. The wagon has sold 3 million copies in the United States over 30 years, becoming as synonymous with Subaru as the Miata sportscar is with Mazda.
The design of the 2026 Subaru Outback wagon is much boxier to appeal to SUV-hungry customers. Henry Payne, The Detroit News
As the U.S. market’s tastes swung to SUVs and station wagons and sedans died off (the Legacy exits U.S. showrooms after this year), Outback evolved with the market to a more off-road focused vehicle that was lifted over eight inches off the ground — as high as a Jeep Wrangler. It even gained a dirt-kicking Wilderness model armed with another inch of ride height, skid plates, and all-terrain tires.
The ‘26 model goes all in as an SUV.
“The Outback is moving on from the Legacy, which is going away,” said Aaron Cole, Subaru communications manager, standing next to the boxier model. “Form follows function and people are asking, for example, how they can fit a dog crate under the rear hatchback.”
He noted that the Outback’s wagon-like proportions are largely unchanged with the same wheelbase and two more inches of height. Its greenhouse-to-body ratio looks familiar, but its SUV aspirations are undeniable.
“The Outback has evolved with the customer,” said Cole. “Without Legacy we are attracting a different customer, and the blockier look appeals to that trend.”
If Subaru has confidently evolved into as SUV-focused lineup including the Crosstrek, Forester and Ascent, the brand has not been as sure-footed about introducing electric cars. Buyers may “Love the Earth” — to quote the brand’s green-focused advertising — but they have been resistant to EVs and their unpredictable range and charging options.
The 2025 New York Auto Show marked the debut of the 2026 Subaru Trailseeker (foreground), the brand’s second EV model made in Japan. Henry Payne, The Detroit News
Subaru took a tentative step in 2023 with the Solterra, a SUV roughly the same size as the Outback built on a battery platform developed by Toyota.
Its sold just 12,447 units in the United States last year — a long way from the popular Outback’s 168,771. Given its green-friendly buyer demographic, Subaru believes customers will warm to EVs as charging infrastructure and range improves.
But like other manufacturers, Subaru can’t afford to wait as it must meet the more immediate EV wishes of government regulators.
Subaru rolled out a second EV — the Trailseeker — at the U.S. auto show as Subaru faces looming EV sales mandates from New York and 11 other so-called Zero Emission Vehicle states. For the 2026 model year, ZEV states require that 35% of brand sales be electric or face fines that could soar into the billions as ZEV states phase out all gas-powered vehicle sales by 2035.
Toyota or Subaru? If the interior of the Subaru Trailseeker looks a lot like a Toyota bZ4X, that’s because the two models share a platform. Henry Payne, The Detroit News
“No manufacturer is going to meet the mandates,” said Erin Keating, executive analyst for Cox Automotive. “Subaru will be challenged to meet the mandate, but their dealers will be impacted if they don’t provide the vehicles customers want.”
To sweeten the deal, Subaru’s new Trailseeker is a more rugged-looking version of the Solterra EV in keeping with the brand’s overlanding image. It gets more grunt from its twin electric motors (375 horsepower), an off-roady X mode and 3,500-pound tow rating.
“It looks a lot like a Subaru so that you can get away on the weekend and go anywhere,” said Senior Vice President for Sales Troy Poston.
But that capability comes at a price and the Trailseeker will get just 260 miles of range — before buyers stress it with towing and 4.4-second 0-60 launches. Still, that’s a jump from the initial 2023 Solterra’s 228 miles of range; Solterra has leapt to 280 miles of range for the 2026 model year.
That progress, however, faces increased speed bumps. While states turn the mandate screws, federal $7,500 EV sales subsidies are poised to go away under new EPA management. Worse, EV sales credits generated by EV makers like Tesla Inc., Rivian Automotive Inc. and Lucid Motors are no longer enough to satisfy the growing demands of the 35% sales mandates.
“The legacy manufacturers have had three choices,” said Keating. “1) buy tax credits from EV makers; 2) pay the fines: or 3) build EVs. Now none of those options look good.”
And for Subaru, the costs will go even higher if the Trump administration’s 25% tariff on Japanese imports holds. Both the Trailseeker and Solterra are built in Japan and Solterra is already priced $10,000 north of its gas-fired Outback sibling.
The 2026 Subaru Outback is splashed in mud at the 2025 New York Auto Show to appeal to off-roaders. Henry Payne, The Detroit News
The Cox analyst said the tariff game is still in the early stages and that manufacturers expect that better rates will be negotiated.
“It’s a real delicate balance,” she said of the situation manufacturers like Subaru face. “For all the attention tariffs get, they appear negotiable. The ZEV state mandates, however, don’t have many walkarounds.”
She said there is hope states will pull back as the regulations bite and the Trump administration and a Republican Congress apply pressure. ZEV-state Maryland, for example, paused its mandates on April 8 after Washington threatened to freeze federal monies for electric charging stations.
On the New York show floor, meanwhile, Subaru hopes that the public will embrace its redesigned Outback when doors open to the public Friday. One caveat? The 2026 Outback will be manufactured in Japan and subject to tariffs.
Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or @HenryEPayne.