Elon Musk Says The Impact Of Auto Tariffs On Tesla Is ‘Significant’

The proposed auto tariffs from Donald Trump have sent shockwaves through the global automotive sector, but Tesla stands apart, according to CEO Elon Musk, who stresses the levies will create substantial disruption. The U.S.-focused supply chain of Tesla (TSLA.O) became the main reason for its stock increase of 2% on Thursday while other automakers experienced market declines.

The new 25% import tariffs affect vehicle and parts shipments, which could drive up vehicle prices between 5,000 to 15,000, according to Goldman Sachs. The share prices of Fo(F.N),.N), (GM.N),.N), and Stellantis declined by 2.1% to7%,%, while Tesla’s domestic production facilities shielded it from some negative effects.

Musk explicitly stated Tesla would face some impact from the new tariffs. The price of Tesla parts originating from foreign countries will experience a direct impact because of these new tariffs. The price consequences are significant, according to his assessment. Tesla sources lithium-ion batteries from China’s CATL (300750.SZ) and components from Japan, South Korea, and Mexico, per ImportYeti data. Trump proposed that the new tariffs would benefit Tesla, but Musk confirmed he never provided advice about the policy to the president.

Analysts predict Tesla could gain from its Model Y sales in the U.S. market since about half of the vehicles in its segment face potential tariffs. The company operates against increasing market obstacles in foreign territories. The European and Canadian markets face declining EV subsidies and growing political opposition toward Musk’s Trump connections, which threatens their sales potential. Tesla does not qualify for rebate programs in Britain, the EU, or Canada since these regions have decided to reduce their incentive programs.

The U.S. market advantage Tesla enjoys may not be enough to counter its international business obstacles, according to Leverage Shares analyst Sandeep Rao. Investors anticipate Tesla’s Q1 delivery results next week, which are expected to reach 398,000 vehicles, while monitoring how trade tariffs and CEO Elon Musk’s political connections will influence the company’s direction.