President Donald Trump’s 25% tariffs on all vehicles imported into the U.S. and some auto parts will hurt Tesla far less than its competitors, according to industry analysts, though CEO and close Trump aide Elon Musk insists his company will still feel the impact.
Musk says Tesla is “NOT unscathed” from Trump’s tariffs, but auto industry analyst consensus ... More
Compared to its legacy peers Ford, General Motors and Chevrolet, and Jeep parent Stellantis, Tesla is “best off” from Trump’s new trade directives, Deutsche Bank analyst Edison Yu wrote in a Thursday note to clients.
Unlike its Michigan-based counterparts (U.S. operations for the Dutch Stellantis are headquartered in the state), Tesla assembles all of its vehicles in the U.S., shielding it from the worst of the blanket import taxes.
By comparison, the “worst positioned” General Motors sources some 40% of its cars from Canada and Mexico, according to JPMorgan analyst Ryan Brinkman, who estimates General Motors would face a $14 billion hit to earnings from the new levies.
Tesla is “NOT unscathed” and the “tariff impact on Tesla is still significant,” Musk posted to his X social media site late Wednesday.
But the company’s only major imported auto parts potentially facing the new tariffs are wire harnesses from Mexico, according to Deutsche Bank, which forecasts a 1.8% corresponding price increase needed for Tesla to offset the costs associated with the levies, a fraction of the 5.8% or more necessary increases faced by Ford, General Motors and Stellantis.
The comparatively small impact was evident in New York trading Thursday, as shares of Tesla gained 1% as Ford (down 3%), General Motors (down 8%) and Stellantis (down 4%) stocks struggled. Also sinking Thursday were Europe-listed automakers with significant U.S. dealings as shares of BMW, Ferrari and Mercedes each fell at least 2%.
“Tesla wins, Detroit bleeds,” Bernstein analysts led by Daniel Roeska declared Thursday. “Tesla is the clear structural winner…. For everyone else, this is a margin reset and real drag on near-term earnings power,” Roeska continued.
To Musk’s point, Tesla is far from immune from a tariff-driven hit. Any retaliatory trade responses abroad may damage Tesla’s already sputtering business abroad, considering non-U.S. sales account for 51% of its revenue. “The imposition of tariffs…will have an impact on our business and profitability,” Tesla’s chief financial officer Vaibhav Taneja said in the company’s January earnings call. Partially influencing Tesla stock’s more than 30% drop over the last two months was Wall Street’s sour reaction to the impact of tariffs, especially Trump’s 20% additional tariffs in China, on the automaker.
Nearly $6,000. That’s how much more expensive the average car in the U.S. will get from the 25% auto tariffs, Morgan Stanley analyst Adam Jonas estimated Thursday.