Analysis suggests that the 25% tariff on foreign-made cars announced by U.S. President Donald Trump could be a boon for Tesla, the electric vehicle company led by CEO Elon Musk.
On the 26th (local time), The New York Times (NYT) observed that Tesla could be a "winner" from President Trump's auto tariff policy and may suffer less damage compared to its competitors.
Tesla manufactures all vehicles sold in the U.S. domestically, in states such as California and Texas. Therefore, it does not have to pay the 25% tariff imposed on imported fully assembled cars.
In particular, Tesla's popular models, the sport utility vehicle (SUV) Model Y and the sedan Model 3, are expected to benefit. This is because competing models like General Motors (GM)'s Chevrolet Equinox EV and Ford's Mustang Mach-E are produced in Mexico and use more imported parts than Tesla vehicles.
However, since parts covered under the United States-Mexico-Canada Agreement (USMCA) are temporarily exempt from tariffs, the NYT reported that it remains uncertain how the competitive landscape will change.
According to CNBC, when asked by reporters at the White House whether the new tariffs on cars would be good for CEO Musk, President Trump said, "It could be neutral or good," adding, "It will be good for anyone who has a factory in the U.S."
However, he drew a line by stating, "He has never asked me for anything related to business," indicating that CEO Musk did not influence his decision to impose the tariffs.
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