According to Wedbush analyst Dan Ives, Tesla and Detroit’s Big Three—General Motors, Ford, and Stellantis—could benefit from a potential delay in President Trump’s auto tariffs.
In late March, President Trump announced 25% tariffs on imported vehicles, effective April 3, 2025. The U.S. President also announced tariffs for auto parts, slated for May. Ives previously criticized Trump’s auto tariffs, calling them a source of “pure chaos” for the auto industry.
“A U.S. car made entirely with U.S. parts is a fictional tale,” he said, warning that tariffs could spike car prices by $5,000 to $10,000.
Ives emphasized that dismantling a decades-old global supply chain overnight is impractical. He predicts the delay could shift the May tariffs’ focus on fully assembled vehicles rather than parts, a move the Wedbush analyst sees as less disruptive.
“Wedbush firmly believes that the more practical and effective approach would be to impose tariffs on finished vehicles rather than on auto parts, which are still essential to U.S.-based car production,” he added.
A shift to fully assembled vehicles from auto parts could ease immediate pressures on U.S. automakers, preserving production stability. For Tesla and the Big Three, the auto tariff shift offers a strategic advantage in a turbulent trade landscape, though global market reactions remain a key variable.
The Wedbush analyst believes Tesla is well-positioned to handle Trump’s auto tariffs due to its robust U.S. production footprint.
“When it comes to the tariff issue, they are actually best positioned relative to the Detroit Big Three and others and obviously foreign automakers. Still impacted, Musk has talked about that, in terms of just auto parts,” Ives noted.
Wedbush maintains a $315 price target for Tesla’s stock, reflecting confidence in its resilience. However, Ives cautioned that China’s response to Trump’s auto tariff looms over Tesla. The next few quarters will be critical for Tesla to navigate these challenges while capitalizing on its domestic manufacturing edge.
Meanwhile, The Big Three is reliant on imported parts but builds many vehicles domestically. As such, GM, Ford, and Stellantis would also gain from avoiding an auto parts tariffs.
