 "'Tesla is not unscathed': Elon Musk on Trump's tariffs on automobiles")
Elon Musk, the world’s richest person and principal ally of US President Donald Trump, has said that Tesla would not be untouched from US tariffs on automobiles.
Trump on Wednesday announced 25 per cent tariffs on all foreign-made automobiles . These tariffs will come into effect on April 2. He wants to raise $100 billion in new revenue a year from automobile tariffs.
In a post on X, Musk said that his Tesla “is not unscathed here”.
Musk further said, “The tariff impact on Tesla is still significant.”
Musk-owned Tesla makes cars in at least two factories in the United States, one factory in Germany, and one factory in China. It also has other manufacturing facilities abroad that make batteries and other machinery used in manufacturing. Last year, half of all Tesla’s cars were made in China.
As Tesla depends on foreign manufacturing so much, the costs are expected to rise with tariffs. Musk admitted it on X.
“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial,” said Musk.
However, China is still expected to be least affected by tariffs with a market share of just 0.6 per cent last year in the United States. Mexico has the highest share of automobile exports to the United States (15.4 per cent), followed by Japan (10.2 per cent), and Canada (9.2 per cent), according to CNBC. These countries are set to be affected the most with automobile tariff.
Automobile stocks fell sharply on Wednesday with Trump’s announcements, with General Motors, Stellantis, and Ford Motor all losing around 5 per cent. The S&P 500 fell by over 1.1 per cent, the Dow Jones Industrial Average fell by 0.4 per cent, and Nasdaq fell by more than 2 per cent, with tech leaders Nvidia and Tesla both closed falling by more than 5 per cent each.
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