Tesla could come out ahead after U.S. President Donald Trump announced a new 25% tariff on all foreign-made cars, set to begin next week. The move has shaken the auto industry, with analysts saying it will hit most traditional carmakers hard—but benefit Tesla, which builds all of its vehicles in the U.S.
Shares of Tesla jumped as high as 5% on Thursday following the news. In a note to clients, Bernstein analyst Daniel Roeska summed up the market reaction: “Tesla wins, Detroit bleeds.”
Roeska called Tesla the “clear structural winner” of the policy, noting its domestic production makes it less vulnerable to international trade risks. On the flip side, he warned that companies like Ford and GM could see their profits fall by up to 30% this year due to higher costs, according to CNBC.
UBS analyst Joseph Spak agreed, saying Tesla and Rivian—another U.S.-based EV maker—are better positioned since they produce 100% of their vehicles domestically. Rivian’s shares also rose nearly 5%.
While Tesla may benefit, Musk was quick to point out that the company isn’t immune to the impact. He posted on X to say, “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”
Tesla’s stock has dropped about 30% this year, partly due to political controversy surrounding Musk, a known Trump ally. Still, Trump said earlier this month he would buy a Tesla to support the company but claimed Musk had no role in shaping the new tariff plan.
TD Cowen analyst Itay Michaeli said Tesla’s strong U.S. supply chain helps, especially for the popular Model Y. He called Trump’s policy “close to the worst case outcome” for legacy automakers, with Stellantis likely to be hit the hardest and Ford the least.
Some analysts estimate car prices could rise by $4,000 to $5,000 as companies try to pass the extra costs on to consumers.
Stocks for Detroit automakers dropped Thursday:
Despite the broader industry concerns, most analysts still recommend buying Tesla stock, with average forecasts suggesting about 18% upside from current levels.
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