Tesla is poised to benefit from a new 25% tariff on all foreign-made cars announced by U.S. President Donald Trump. The move, set to begin next week, has sent shockwaves through the auto industry, with analysts predicting that traditional carmakers will be hit hard while Tesla, which builds all of its vehicles in the U.S., stands to gain.
Following the news, Tesla’s stock surged by up to 5%, prompting Bernstein analyst Daniel Roeska to declare Tesla as the “clear structural winner” of the policy. He noted that Tesla’s domestic production shields it from international trade risks, unlike companies like Ford and GM, which could see their profits plummet by up to 30% this year due to increased costs.
UBS analyst Joseph Spak echoed Roeska’s sentiments, stating that Tesla and Rivian, another U.S.-based EV maker, are in a better position as they produce all of their vehicles domestically. Rivian’s shares also saw an increase of nearly 5%.
Despite the potential benefits, Tesla CEO Elon Musk acknowledged that the company will still be impacted by the tariffs. He emphasized the significance of the tariff impact on Tesla, despite the overall positive outlook for the company.
While Tesla’s stock has experienced a 30% decrease this year, partly attributed to political controversies surrounding Musk, Trump recently expressed support for the company by stating his intention to purchase a Tesla. However, he clarified that Musk had no involvement in shaping the new tariff plan.
Analysts anticipate that car prices could surge by $4,000 to $5,000 as companies attempt to offset the additional costs by passing them on to consumers. This has resulted in a decline in stock prices for Detroit automakers, with Ford down 3%, GM down nearly 8%, and Stellantis down over 2%.
Despite concerns within the industry, most analysts continue to recommend buying Tesla stock, with average forecasts suggesting an 18% upside from current levels. The impact of the new tariffs remains to be seen, but Tesla’s domestic production and strong U.S. supply chain position it favorably in the evolving automotive landscape.