As apolitically as possible, how is Tesla affected by Tariffs?

[hemiarch]

Curious to hear what the general consensus here is.
It is VERY hard in my opinion to sort out political noise from facts.
I have met some of the smartest and most informed people on this subject here so please….share your point of view and discuss.

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[misdemeanor]

Tesla is affected by tariffs primarily through its global supply chain and export markets, though its impact varies depending on the specifics of the tariffs and its operational structure. As a US-based manufacturer, Tesla produces all vehicles sold in the United States at its factories in California and Texas, which shields it from tariffs on finished vehicles imported into the US. This gives Tesla an advantage over competitors like Ford, General Motors, or Hyundai, which rely on importing some vehicles from Mexico, Canada, or other countries. For example, a 25% tariff on imported cars would increase costs for those competitors, potentially making Tesla’s domestically produced vehicles more price-competitive in the US market.

However, Tesla is not immune to tariff-related costs. It sources a significant portion of its parts globally—approximately 20-30% of components for US sold vehicles come from outside the US, including Mexico (over 20% for some models), Canada, and China. Tariffs on imported auto parts, such as lithium-ion batteries from China or steel and aluminum from Canada and Mexico, raise Tesla’s production costs.

 

[dalton108]

In a word, “negatively.“

I think the companies like Apple and Tesla that excel at supply chain and logistics will make the most of it, but there’s no “winning” a trade war.

 

[hemiarch]

I lost a lot of money today. I know that for sure. Of course, that extends way beyond Tesla.

 

[tingmo13]

I lost a lot of money today. I know that for sure. Of course, that extends way beyond Tesla.

 

[hemiarch]

Yes. That’s true. And I’m not planning to. It’s just that tax season is here and this is terrible timing for the tide to go out and expose all those swimming naked.

 

[YDR37]

Tesla exports some vehicles (Model S and Model X) from the US to Europe and Asia. Those European and Asian countries could respond to Trump's tariffs by applying reciprocal tariffs to US-made Teslas. This would make the MS and MX more expensive and less competitive overseas, thereby hurting Tesla's foreign sales.

However, the number of US-manufactured vehicles that are exported by Tesla is relatively small, so this is probably only a minor effect as tariff impacts go. The tariffs on car parts that Tesla imports to the US are probably much more significant.

 

[REM]

The one thing I want to mention is that tariffs are primarily supposed to be used to correct disparities in trade agreements between two or more nations.

They are only effectively if the initiating country actually sticks to their guns long enough for the opposing nations to yield and level the field again; to which the tariff is removed and new trade agreements are ratified.

I sincerely hope we stick to our guns long enough to bring a net positive outcome. The people who are complaining the most don't understand how ugly the alternative is: continuing to get shafted left and right just like we have been for ages

Tariffs also drive domestic manufacturing back to levels they should be. For many decades we have outsourced manufacturing to an extremely ugly degree, and now, on the verge of hyperinflation, we are reaping the due reward of it.

 

[sean-techventures]

Tesla exports some vehicles (Model S and Model X) from the US to Europe and Asia. Those European and Asian countries could respond to Trump's tariffs by applying reciprocal tariffs to US-made Teslas. This would make the MS and MX more expensive and less competitive overseas, thereby hurting Tesla's foreign sales.

However, the number of US-manufactured vehicles that are exported by Tesla is relatively small, so this is probably only a minor effect as tariff impacts go. The tariffs on car parts that Tesla imports to the US are probably much more significant.

I'm pretty sure we are the ones applying reciprocal tarrifs... in the case of EU, its the VAT tax. Won't go into details, but the US is negative affected by VAT tax as opposed to companies within the EU.

 

[Dahongfei]

I lost a lot of money today. I know that for sure. Of course, that extends way beyond Tesla.

It’s all just paper money. Just like With Covid downside, we will come back and even better than before.

 

[hemiarch]

It’s all just paper money. Just like With Covid downside, we will come back and even better than before.

Thank you. Helps to keep that perspective.

 

[TheLastStarfighter]

Teslas are CUSMA compliant and most parts are North American made, so for those in North America very little impact. No tariffs on the cars and most parts. The tariff on steel and aluminum is probably hurting them a bit.

 

[YDR37]

We usually think of Tesla as a car company, but a significant fraction of their revenue comes from Powerwalls and Megapacks (basically big batteries) for energy storage. Those products use a lot more imported components than the cars do, and the tariff hit will probably be more significant.

 

[rtfitch]

I lost a lot of money today. I know that for sure. Of course, that extends way beyond Tesla.

It's not a loss if you don't sell, so fear not.

Make a practice of not checking your stats for the next two weeks...in the end, you will be a wiener, errrr...winner.

Perfect time for a shopping spree and Santa spent some some serious dough, today...have to plan ahead when you are 487 years old and hope to double that age, need to keep the feed troughs full for the reindeer.

Life is ALWAYS good.

 

[Crissa]

The problem with tariffs is that the domestic production depends on foreign competition and/or raw materials to keep the prices down.

If there's no competition, then there's little stopping suppliers from raising their prices, as the tariffs trap their customers onto an island.

https://www.thefabricator.com/thefabricator/blog/metalsmaterials/2018-steel-year-in-review

Prices of inputs will go up. And Tesla has shown they will keep the price anywhere that matches their inputs... Maybe their drop in demand will keep them from raising the retail prices.

?‍

-Crissa

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