Trump Auto Tariff Relief “Helps Tesla a Lot,” Leaves Others Behind

Donald Trump’s latest adjustment to automobile tariffs were billed as relief for the Big Three carmakers, but a leading analyst said Wednesday that Elon Musk’s Tesla will benefit most while others will be stuck “in quicksand” — potentially creating a slight advantage for a company whose CEO donated nearly $300 million to Trump and other Republican causes during last year’s election.

Trump’s first round of massive tariffs fueled widespread attention to the fact that, of the major carmakers, Tesla seemed to be the best protected from the direct impact of tariffs.

“Helps Tesla a lot, Detroit Big 3 still in quicksand.”

Trump issued a new executive order Tuesday scaling back some auto tariffs, a move sought for weeks by domestic automakers who had been whacked with massive duties on imported car parts. While Trump’s latest tariff seesaw could provide temporary relief to some of the Big Three, however, analyst Dan Ives of Wedbush Securities said Tesla still has an edge.

“Helps Tesla a lot, Detroit Big 3 still in quicksand,” Wedbush said in an email.

Wedbush was responding to the complicated impact of two executive orders Trump issued Tuesday, one meant to eliminate “cumulative” tariffs on imported cars and parts, and another providing temporary relief on imported auto parts for cars primarily made in the U.S.

Wedbush said that overall, the latest changes should help Tesla more than the other carmakers, who have greeted the latest Trump announcement with cautious praise.

“While not completely unscathed, Tesla is in the best position to weather this storm vs. the Big 3 and other foreign automakers as it localized 85% to 90% of its supply chain in the US and will be exempt from many of these tariffs,” Wedbush said.

Neither the White House nor Tesla immediately responded to requests for comment.

Tesla models dominate the top of the chart for the percentage of domestic content in their vehicles, with other ostensibly American auto manufacturers falling far behind. According to the “2024 Made in America Auto Index,” produced by American University’s Kogod School of Business, Tesla occupied the top five spots by percentage of their car parts manufactured in the U.S. or Canada.

“Their Model 3 Performance Model took the no. 1 spot, followed by the Model Y at no. 2 and the new Cybertruck at no. 3. Tesla’s Models S and X tied for the no. 4 spot,” said a webpage on the index. The Ford Mustang is tied for the fourth slot with two Tesla models.

The new Trump orders offer relief from earlier tariffs by effectively removing penalties for cars that are made up of 85 percent or more domestic content.

According to the Kogod chart, only two cars have 85 percent or greater U.S. and Canadian content: the Tesla Model 3 and Tesla Model Y. The Tesla Cybertruck is not far behind at 82.5 percent.

In a statement, White House spokesperson Kush Desai said the new tariffs were the result of “close cooperation” with the auto industry and were designed to give manufacturers “runway to reshore manufacturing.”

“Any notion 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,” Desai said.

Despite having a relative edge over other automakers, analysts have still warned that Trump’s initial round of massive tariffs posed a threat for Musk because they could lead to lower economic growth overall. Musk has been one of the loudest voices calling on Trump to scale back his tariffs on cars and other items. In a Tesla earnings call last week, he said that he would continue to advocate for lower tariffs.

Trump’s tariff tweaks were not enough to dissuade Wedbush from sounding a pessimistic note about the future of the auto industry. He said the sticker price of an average car could go up $5,000 to $10,000.

“This continues to be a Twilight Zone situation for the entire automaker industry which continues to be paralyzed further cost increases and uncertainties that will change the paradigm for the US auto industry for years to come in this stays into effect,” Wedbush said. “We believe the auto tariffs in their current form adds up to $100 billion of costs annually to the auto industry and will essentially get passed directly onto the consumer and clearly erode demand on Day 1 of tariffs.”

Musk has long been a beneficiary of government largess — a position he has looked to solidify with Trump’s ascendancy.

When an incipient protest movement caused Tesla to take a major financial hit following Musk’s heavy involvement in Trump’s far-right government, the two men staged what amounted to an unprecedented live ad on the White House lawn for the electric cars. Trump declared at the event that vandalism tied to the protest movement against Tesla was domestic terrorism.

The protest movement against Musk and Tesla has continued to grow.

Update: April 30, 2025, 3:48 p.m. ET
This story has been updated with a statement from the White House received after publication.