Wall Street Sees Tesla a Winner from Trump's Auto Tariffs but Musk Cautions ...

TMTPOST -- Tesla Inc. shares rose as much as 7.3% before paring most gains on Thursday. Shares eked out a rally of nearly 0.4% that day after leader of the U.S. electric vehicle (EV) behemoth showed more cautious on the U.S. auto tariffs despite Wall Street’s upbeat on its outlook.

Credit：Tesla

Tesla CEO Elon Musk saw the upcoming 25% auto tariffs would pose significant impact on his company. “Important to note that Tesla is not unscathed here. The tariff impact on Tesla is still significant,” Musk on Wednesday posted on his social media X, formerly Twitter.

Musk then explained how the tariffs could hit the company. "To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial," Musk said in another post on X.

U.S. President Donald Trump on Wednesday signed an executive proclamation to impose a 25% tariff on all automobile imports, effective on eastern daylight time April 3 at 12:01 a.m. He told reporters that the tariff will affect “all cars that not made in the United States.”

Trump said Musk, his key advisor didn’t give advice on auto tariffs “because he may have a conflict” ,and the chief executive had never asked for” a favor in business whatsoever.” Nevertheless, the president predicted these tariffs may be good for Tesla.

"It could be a net neutral or they may be good. He has a big plant in Texas, he has a big plant in California and anybody who has plants in the United States, it's going to be good for, in my opinion," Trump said Wednesday when announcing the auto tariffs.

Trump on Wednesday signed an executive proclamation to impose a 25% tariff on all automobile imports, effective on eastern daylight time April 3 at 12:01 a.m. The new tariff is “permanent”, Trump underscored in the Oval Office prior to his signing. He told reporters that the tariff will affect “all cars that not made in the United States.”

Trump added If the cars are “made in the United States, it’s absolutely no tariff.” "We are going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they have been taking over the years," the president states.

Many Wall Street analysts seem to agree Trump since Tesla itself has been boasting this week about its US credentials, claiming in a post on X that its models “are the most American-made cars.”

In an analysis this week, CFRA Research analyst Garrett Nelson described Tesla as the “least exposed” to the new duties due to its domestic manufacturing operations. TD Cowen analyst Itay Michaeli believes Tesla’s substantial domestic sourcing helps make the company a “relative winner.” Wedbush Securities analyst Dan Ives late Wednesday commented that Tesla would be less exposed to tariffs as their production and assembly for U.S. vehicles is all in the country.

Compared with "the rest of the industry" Tesla will be "pretty well insulated" from the tariffs, Canaccord Genuity analyst George Gianarikas told Yahoo Thursday morning. "There will be an impact without a doubt, depending on what it is, but Tesla for example makes their vehicles in the United States for the United States," Gianarikas said.

Bernstein analyst Daniel Roeska concluded in a Thursday note: Tesla wins, Detroit bleeds. In Roeska’s view, Tesla is a “clear structural winner” of Trump’s tariff policy, noting that the EV maker has a localized,strong market share and is “better insulated from trade risk” .

“For everyone else, this is a margin and real drag on near-term earnings power,” said Roeska. He anticipated Ford and General Motors could record an up to 30% decline in the key measure of profitability EBIT, or earnings before interest and taxes, this year.

UBS analyst Joseph Spak said both Tesla and Rivian could “fare better” with 100% of production in the U.S. Rivian is Tesla’s EV competitor that manufactures all of its vehicles in the United States. Shares of Rivian settled 7.6% higher on Thursday.