Tesla isn’t exempt from tariffs, but economists say the company may have a „head start“ over its competitors.
Elon Musk’s Tesla may have a head start on President Donald Trump’s latest rounds of tariffs, according to economic analysts. Trump announced the new tariffs on dozens of countries across the globe on imports on Wednesday, what he called „liberation day.“Why It Matters
Trump has argued that the tariffs are necessary to restore U.S. manufacturing, but economists say companies are going to pass along the new expenses to consumers, resulting in Americans paying higher prices.
A previously announced tariff on automobiles also went into effect at midnight.
The stock market reacted negatively to the new tariffs on Thursday, with the Dow Jones Industrial Average dropping more than 1,000 points.What To Know
Tesla, which produces its vehicles in factories in California and Texas, may have an advantage over some of its competitors in the automobile industry in grappling with the new tariffs because of its domestic production. Bernstein analyst Daniel Roeska wrote in a note to clients last week that „Tesla wins“ while „Detroit bleeds“ because of the tariffs, Forbes reported.
„Tesla is the clear structural winner. For everyone else, this is a margin reset and real drag on near-term earnings power“, he wrote
Ryan Monarch, a professor of economics at Syracuse University, told Newsweek on Thursday that Tesla has an advantage over its competitors but won’t go completely unscathed by the tariffs.
„They are not unaffected by the tariffs, but they kind of have a head start on a number of their competitors, especially in the EV sector, in terms of locating their supply chain and getting their inputs from products in the U.S.“, he said.
Musk’s role in the Trump administration as head of the Department of Government Efficiency (DOGE) may also be beneficiary to the company, Monarch said.
„Elon Musk’s involvement in the government puts his company in a good position to ask for exemptions or to look for a way around these tariffs“, he said.
