Polaris Inc. shares fell more than 17% over two sessions this week after competitor BRP Inc. dropped a bombshell announcement that restructured Section 232 tariffs on steel, aluminium and copper would cost the Canadian powersports maker more than $500 million for the remainder of 2026 alone.
BRP’s own shares collapsed 35%, but the market’s response to Polaris reflected recognition that the two companies operate in almost identical product and market categories, making BRP’s tariff exposure a direct forward indicator for what Polaris can expect when it reports its own Q1 results on April 28.
The tariff change that triggered the crisis came into effect on April 6, following a presidential proclamation. It replaced the previous structure, under which a 50% tariff applied only to the metallic content within imported vehicles, with a 25% levy on the total value of products made substantially of steel, aluminium or copper. For snowmobiles, off-road vehicles and side-by-sides manufactured in Canada and Mexico and sold primarily into the US market, the practical financial impact of that structural shift is enormous. BRP’s snowmobiles and the majority of its off-road vehicle range all fall under the new definition, and the company said the incremental cost before any mitigation measures would exceed $500 million for the partial year remaining after April 6.
Polaris competes directly with BRP in every major category: snowmobiles under the Polaris brand, side-by-sides under the RZR and RANGER lines, and ATVs under the Sportsman platform. The Minnesota-based company also sources significant production from facilities outside the US. While the precise tariff exposure for Polaris differs in its mechanics, the overlap in product range and sourcing geography makes BRP’s disclosure an unwelcome preview of what Polaris management will face on its April 28 earnings call.
Polaris had been navigating an already challenging environment before the tariff shock. Its market capitalisation stood near $3.1 billion after the decline, having already fallen from higher levels amid soft consumer demand for big-ticket recreational vehicles. Higher fuel prices driven by the Iran conflict have additionally suppressed enthusiasm for discretionary spending on outdoor powersports. The company had previously celebrated the 40th anniversary of its all-terrain vehicle line and launched refreshed model ranges including the RANGER 500 priced under $10,000.
