In the latest turn of a tariff saga, President Trump yesterday announced 25% tariffs on foreign-made automobiles and car parts, piling onto increased steel and aluminum tariffs imposed on March 12. The auto tariffs would take effect on April 3—although previous Trump administration tariffs have been walked back or canceled—and were touted by the president as a measure that would raise $100 billion and boost domestic manufacturing.
The timeline leaves automaker executives a week in their lobbying efforts to influence Trump and his allies on the policy. Over the past couple of months, auto CEOs made their case to the president that tariffs would hurt domestic companies by driving up costs throughout the supply chain. A study by consultant Anderson Economic Group projected that the tariffs could increase car prices by up to $12,000.
Musk’s Tesla stands to be the winner from Trump’s latest trade salvo: Deutsche Bank analysts said today that Tesla and Ford would be the automakers most shielded from tariffs, largely because their assembly facilities are in the U.S.—all of Tesla's U.S.-sold vehicles, and around 80% of Ford's. GM would be hard-hit due to its plants in Mexico.
Tesla has been losing sales to EVs like those made by GM and Ford in Mexico, which also have more imported parts. By comparison, Tesla’s components are between 60-75% manufactured in the U.S., according to analysts. Volkswagen and Hyundai would be among the most affected foreign carmakers by the sweeping tariffs.
Musk, in a post on X, took pains to claim that Tesla would be “NOT unscathed” by the measure, though didn’t add any information. Tesla’s sales have fallen and its U.S. market share is on the decline over the past four years. It faces strong competition abroad from EV automakers like China’s BYD—and a roller-coaster stock price, with protests over Musk’s high-profile role in the administration.
Musk gave at least $264 million to super PACs backing Trump’s White House comeback last year, a sum that doesn’t include possible “dark money” donations. Musk is continuing to open his wallet to back Republican-favored candidates—and protect House GOP seats against redistricting efforts—as his DOGE team moves into federal agencies. One industry analyst, Dan Ives of Wedbush, said last year that Tesla could benefit if the Biden-era tax credits for electric vehicles are revoked, combined with a round of foreign tariffs, by virtue of its established market position.
