Written by Cláudio Afonso | LinkedIn | X
Tesla shares jumped more than 6% early Thursday to trade above $291, as the electric vehicle maker’s domestic manufacturing footprint appeared to shield it from the brunt of new 25% tariffs on foreign-made vehicles and components that hit rivals harder.
Unlike General Motors Co., Ford Motor Co., and Stellantis NV, Tesla assembles all the vehicles it sells in the US within the country—leaving it relatively less exposed to the trade measure set to take effect in early April.
Still, Chief Executive Officer Elon Musk cautioned that Tesla won’t escape the impact entirely. “Tesla is NOT unscathed here,” Musk wrote Wednesday on X. “The tariff impact on Tesla is still significant.”
He elaborated in a separate post: “To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.”
Tesla’s reliance on US production has emerged as a potential advantage. TD Cowen analyst Itay Michaeli said Thursday that the company is “a relative beneficiary given 100% US production footprint and substantial US sourcing.” He added that the Model Y, Tesla’s best-selling vehicle, competes in a midsize crossover segment where “close to ~50% of vehicles could be subject to tariffs.”
Tesla also ranked first in the 2024 “American-Made Index,” with the Model 3 Performance, Model Y, Cybertruck, and Models S and X occupying the top four positions.
The automaker’s entire US sales volume is sourced from domestic production, giving it one of the highest “Made in America” footprints among its peers. Ford builds 77% of the vehicles it sells in the US domestically, with the remainder coming from Canada, Mexico, and other regions. General Motors sources 52% from US plants, 30% from Canada and Mexico, and 18% from elsewhere.
By contrast, investors punished Tesla’s US competitors. Ford shares declined 2.5% to $10.04, GM dropped 6.8% to $47.50, and Stellantis fell 1.5% to $11.80 in early Thursday trading.
Tesla’s smaller EV rivals could also feel the pressure. In a note Thursday, Bernstein analyst Daniel Roeska said Rivian Automotive Inc. and Polestar are among companies likely to face “added strain due to import-heavy supply chains and limited pricing power.” He added that localization “will become essential.”
Despite the share rally, analyst sentiment on Tesla remains divided. HSBC analyst Michael Tyndall on Thursday cut his price target on the stock to $130 from $165, reiterating a Reduce rating.
“Tesla eschews many of the industry norms (holding list prices firm, making regular facelifts and model renewals) and has to date seen only minimal impact,” Tyndall wrote. “But tougher competition and brand erosion is likely to see the impact of its strategy hurt more.”
He also flagged concerns around Q1 sales: “If March sales represent the ‘usual’ portion of Q1, then 1Q 2025 volumes look to be coming in at c385k – c4% below current VA consensus. However, if the month records the same proportion of Q1 as last year, then volumes could be as low as 343k.”
“That would assume no boost from the new Model Y, which is probably unlikely,” he added. “We suspect the messaging at Q1 will be that the issues are temporary and the future remains bright. We doubt brand issues will be discussed.”
