Impact of Trump's auto tariffs on Tesla is "significant," says Elon Musk

Tesla CEO Elon Musk stated that U.S. President Donald Trump's auto tariffs have a "significant" impact on Tesla. Musk posted on social media platform X: "It is important to note that Tesla is not unscathed. The tariffs still have a large impact on Tesla." He further emphasized that these tariffs affect not only Tesla but the entire automotive industry.

Tesla produces all of its cars sold in the U.S. domestically. However, it imports certain components, electrical parts, and batteries from China. "To be clear, this affects the price of Tesla car parts from other countries. The cost impact is not insignificant," Musk added in another post on X, highlighting the broad implications for Tesla's supply chain and production costs.

Following Trump's tariff announcement, Tesla's stock price fell nearly 6% on Wednesday, further battering the already struggling automaker. The company's stock closed down 5.58% today, at $272.06. Furthermore, data from the European Automobile Manufacturers' Association (ACEA) shows that Elon Musk's Tesla's car sales in Europe have fallen by 42.6% so far this year, indicating a challenging period for the company in key markets.

Data shows that Tesla's China-made electric vehicle sales in February fell 49.2% year-on-year to 30,688 units, the lowest level since August 2022, as the American automaker faces fierce competition from Chinese rivals. Musk's brand has also been hit by a wave of domestic protests in the U.S. since the Tesla CEO became an advisor to U.S. President Donald Trump and began drastically cutting federal government spending, impacting public perception.

To increase demand for its products, Tesla has been seeking to expand into new strategic markets. The electric vehicle manufacturer announced that it will launch in Saudi Arabia next month. Tesla also signed a lease agreement earlier this month to open its first showroom in Mumbai, in line with its plans to sell imported cars in India, demonstrating a commitment to growth in emerging economies.

U.S. President Donald Trump on Wednesday delivered on his long-standing threat to impose new tariffs on imported cars, announcing a 25% import tax on non-U.S. made vehicles starting March 26, with the measure taking effect next week. This move further exacerbates already fragile trade relations between the U.S. and its allies. Trump confirmed that from April 3, the U.S. will impose a 25% tariff on imports of finished vehicles, in addition to existing tariffs.

The new tariffs will apply to cars assembled in countries with free trade agreements with the United States, such as Canada, Mexico, and South Korea. These countries, as well as Japanese and European automakers from Germany, Italy, and the United Kingdom, will be severely affected by the new measures, potentially leading to significant disruptions in global automotive trade flows.