Why Tesla and CEO Elon Musk don't see Trump's auto tariffs as a problem

Automaker stocks present and overseas are getting smoked pursuing President Trump's large determination to enforce 25% tariffs connected overseas autos and definite car parts. But 1 automaker is up — Tesla.

Tesla (TSLA) banal jumped 5% successful aboriginal commercialized arsenic rivals GM (GM) tumbled astir 7% and Ford (F) 3%.

Beyond the evident transportation betwixt CEO Elon Musk's affinity for Trump and his enactment of the DOGE commission, determination are a fewer different reasons wherefore Trump's car policies — some connected tariffs and EVS — whitethorn not beryllium a occupation for Tesla.

The main crushed tariffs aren't apt to impact Tesla is the company's localized manufacturing. Though the institution operates gigafactories successful China and Germany, nary of the EVs built determination are sold successful the US.

Tesla's US-sold vehicles are made exclusively astatine the company's Fremont, Calif., determination oregon astatine Giga Austin successful Texas. Rivian (RIVN) and Lucid (LCID) are the lone different automakers that marque 100% of their vehicles successful the US for US buyers. By comparison, 77% of Ford's autos are made successful the US, followed by Stellantis (57%), Nissan (52%), and GM (52%).

Read more: The latest quality and updates connected Trump's tariffs

TD Cowen's Itay Michaeli thinks this makes Tesla a "relative winner" successful the tariff wars.

"Tesla a comparative beneficiary fixed 100% US accumulation footprint, important US sourcing and with Model Y competing successful a midsize crossover conception wherever adjacent to ~50% of vehicles could beryllium taxable to tariffs," Michaeli wrote Thursday morning.

Trump said successful his quality league past nighttime that helium didn't consult Musk astir the car tariffs due to the fact that the CEO "may person a conflict."

Despite Tesla being a comparative victor successful the situation, immoderate institution execs are a small worried. In an unsigned missive submitted past week to US commercialized typical Jamieson Greer, the institution warned tariffs could pb to retaliation from US export partners and higher prices for parts that tin lone beryllium sourced internationally.

Musk added past nighttime connected X that Tesla is "NOT unscathed here" and that the interaction of tariffs connected the institution is "still significant."

Investors, astatine slightest astatine this point, disagree with Musk's outward assertion, though the CEO did not elaborate however oregon wherefore the interaction would beryllium "significant."

One country that mightiness interest Musk and Tesla is the aboriginal of the national EV taxation recognition that allows for $7,500 rebates to consumers who bargain oregon lease axenic EVs.

Tesla apt would not beryllium if not for that taxation credit, which the institution availed itself to for years during the Obama administration. The EV taxation recognition was extended and enhanced successful President Biden's Inflation Reduction Act signed successful 2022.