Tesla to benefit most from tariff relief, says Wall Street analyst

Trying to get a solid read on how automakers feel about the tariffs is literally impossible, given that no carmaker hoping to remain in good favor with President Trump is going to drill into it publicly.  

Sure, the intent of the adjustments is supposedly aimed at cushioning the blow of the levies to the Detroit Three Automakers. However, one Wall Street Analyst contends that it actually plays out better for a car company considered an outsider in Detroit—that being Tesla $TSLA ( ▲ 2.39% ) . 

The details: According to analyst Dan Ives of Wedbush Securities, the Elon Musk-led electric carmaker stands to reap some major benefits from the relief—which removes penalties for vehicles that are made up of 85% or more domestic content—while the Detroit Three sit stuck “in quicksand,” trying to work their way through the tariffs, as reports The Intercept. 

• Ives says Tesla is in a much better position to weather the tariffs compared to the Detroit 3 and other foreign automakers because 85% to 90% of its supply chain is localized in the US.

• The “2024 Made in America Auto Index”—as cited by The Intercept—has Tesla dominating the top five spots by percentage of their car parts manufactured in the U.S. or Canada.

• Only two vehicles currently meet Trump’s 85% benchmark for U.S. and Canadian content: the Tesla Model 3 and Tesla Model Y—with the Tesla Cybertruck not far out of the scope, at 82.5%. 

White House weighs in: Moving quickly to respond to claims that Tesla is positioned to benefit the most from the adjustments, White House spokesperson Kush Desai issued a statement, contending quite the opposite. 

• The modifications grew out of “close cooperation” with the auto industry and are intended to give manufacturers “runway to reshore manufacturing,” the statement reads.

• The idea that the, “Trump administration, which scrapped Joe Biden’s EV mandates that had massively benefited Tesla, is doing anyone but the American people a special favor is patently ridiculous.” 

Okay… but President Trump did prominently spotlight Tesla on the White House lawn, drumming up how “beautiful” Tesla vehicles are (his words), right? And Musk is pretty tight with Trump—so it’s hard to believe that Tesla wouldn’t be on the mind of the President when coming up with the plan.    

Bottom line: Exactly how well the tariff relief plays out for Tesla remains to be seen, even if Musk zeroes in on turning the company around—given its product and brand challenges in the global EV market, which has become much more competitive.

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