Elon Musk says Tesla (NASDAQ:TSLA) 'Not Unscathed by Tariffs'
Donald Trump's announcement that he plans to slap 25% tariffs on all car imports to the United States has given most automakers whiplash as shares have been roiled by expectations that it will drive up costs and drive down sales.
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Except, that is, for Tesla (TSLA), which through its domestic U.S. manufacturing and sourcing footprint is seen as a relative winner from the tariffs at the expense of its Big Three rivals Ford (F), General Motors (GM) and Chrysler-owner Stellantis (STLA).
TD Cowen analyst Itay Michaeli believes the automaker is a relative beneficiary given 100% U.S. production and substantial U.S, sourcing, and points out its Model Y is competing in a midsize crossover segment where close to 50% of vehicles from rivals could be subject to tariffs.
But Elon Musk was quick to stress that Tesla is not immune, writing on X last night, 'Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.'
It comes after the company sent an unsigned letter to U.S. Trade Representative Jamieson Greer warning that the company was exposed to potential retaliatory tariffs by trade partners and higher prices in its supply chain.
Tesla noted that 'potential actions to rectify unfair trade should also take into account exports from the United States' since 'U.S. exporters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade actions.'
The company called on the USTR to ensure manufacturers 'are not unduly burdened by
trade actions that could result in the imposition of cost-prohibitive tariffs on necessary components, or other import restrictions on items essential to support U.S. manufacturing jobs.'
Investors don't seem to agree much with the idea – Tesla stock has rallied about 16% this week while GM for instance slumped over 7% yesterday. GM makes about half its vehicles outside the U.S. and is seen as among the most exposed to auto tariffs and levies on imported parts such as engines and transmissions.
Another reason for the more positive view on Tesla in the market this week is increasingly the company is seen as insulated from Trump and the GOP-led Congress pulling $7,500 EV tax credits. 'I think it would be devastating for our competitors and for Tesla slightly,' Musk said during an earnings call last year. 'But long term probably actually helps Tesla, would be my guess.'
The other reason is autonomy. Investors are hoping that Trump will ease regulations around the deployment of robotaxis and self-driving technology. 'The value of Tesla overwhelmingly is autonomy,' Musk said on the same call.
Tesla bulls like Dan Ives and Adam Jonas have long argued that self-driving and robotaxis are the main appeal of the stock.
Is TSLA Stock a Buy?
TSLA stock has a Hold consensus rating, with 14 Buys, 11 Holds, and 11 Sells assigned in the last three months. The average price target for Tesla stock is $335.32, suggesting a potential upside of about 23% from the current level.
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