Automaker stocks here and abroad are getting smoked following President Trump’s big move to impose 25% tariffs on foreign autos and certain auto parts. But one automaker is up — Tesla.
Tesla (TSLA) stock jumped 5% in early trade as rivals GM (GM) tumbled nearly 7% and Ford (F) 3%.
Beyond the obvious connection between CEO Elon Musk’s affinity for Trump and his leadership of the DOGE commission, there are a few other reasons why Trump’s auto policies — both on tariffs and EVS — may not be a problem for Tesla.
As of 1:14:43 PM EDT. Market Open.
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The main reason tariffs aren’t likely to affect Tesla is the company’s localized manufacturing. Though the company operates gigafactories in China and Germany, none of the EVs built there are sold in the US.
Tesla’s US-sold vehicles are made exclusively at the company’s Fremont, Calif., location or at Giga Austin in Texas. Rivian (RIVN) and Lucid (LCID) are the only other automakers that make 100% of their vehicles in the US for US buyers. By comparison, 77% of Ford’s autos are made in the US, followed by Stellantis (57%), Nissan (52%), and GM (52%).
Read more: The latest news and updates on Trump’s tariffs
TD Cowen’s Itay Michaeli thinks this makes Tesla a “relative winner” in the tariff wars.
“Tesla a relative beneficiary given 100% US production footprint, substantial US sourcing and with Model Y competing in a midsize crossover segment where close to ~50% of vehicles could be subject to tariffs,” Michaeli wrote Thursday morning.
Trump said in his news conference last night that he didn’t consult Musk about the auto tariffs because the CEO “may have a conflict.”
Despite Tesla being a relative winner in the situation, some company execs are a little worried. In an unsigned letter submitted last week to US trade representative Jamieson Greer, the company warned tariffs could lead to retaliation from US export partners and higher prices for parts that can only be sourced internationally.
Musk added last night on X that Tesla is “NOT unscathed here” and that the impact of tariffs on the company is “still significant.”
Investors, at least at this point, disagree with Musk’s outward assertion, though the CEO did not elaborate how or why the impact would be “significant.”
One area that might concern Musk and Tesla is the future of the federal EV tax credit that allows for $7,500 rebates to consumers who buy or lease pure EVs.
Tesla likely would not exist if not for that tax credit, which the company availed itself to for years during the Obama administration. The EV tax credit was extended and enhanced in President Biden’s Inflation Reduction Act signed in 2022.
