Trump Is Throwing Tesla (TSLA) A Free Lifeline But It’s Not Baked In To Shares Yet

24/7 Wall St. Key Points:

• Tesla (NASDAQ: TSLA) benefits directly from the proposed 25% auto tariffs, as all U.S. sales are sourced domestically, shielding it from input cost increases.
• While peers will face margin compression and supply chain challenges, Tesla avoids disruptions in both production and pricing, positioning it as a relative winner in the near term.
• With negative news largely priced in—including weak China and EU sales—the tariff development offers Tesla a potential margin and competitive advantage tailwind. 
• Ford’s future is in jeopardy, but yours doesn’t have to be. Speak with a financial advisor today to learn whether you’re ahead, or behind on your retirement dreams. It’s completely free, and only takes a minute. You can get started with this quick quiz.

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Transcript:

[00:00:04] Doug McIntyre: So Lee, uh, president Trump, 25% tariffs all cars and car parts coming into the United States. Uh oh. Let’s start with Tesla. Okay. A hundred percent of a Tesla sold in the United States is made in the United States. Okay. So Elon Musk is sitting there and saying, okay, I don’t have to do anything with any of my car prices to keep my margins right where they are.

[00:00:36] Doug McIntyre: That is not true of, it might be true of Rivian (NASDAQ: RIVN) or some small car company, but if you look at the people that Musk competes against the United States. Yeah. In the even space, everybody’s gonna take a haircut here. Yeah. So if you’re one winner, clear winner in this, you know, tariff, tariff decision, it’s Tesla.

[00:00:58] Doug McIntyre: And as you know, Tesla’s struggling right now, China here. So all of a sudden, this is throwing Elon Musk a lifeline. He, he now has the opportunity to be the only person in the market right now who doesn’t have to make any financial adjustments at all. He is also the only person who doesn’t have to worry about getting parts.

[00:01:19] Doug McIntyre: I mean, you know, there’s part of this that’s supply, there’s part of it how much you pay for the supplies and the cars. So if you’re looking at Tesla right now, all things being equal, I think that the drop in unit sales is priced in.

[00:01:33] Lee Jackson: No, yeah. But it’s a, it’s a really good wager down at these levels. It’s a, especially, we have a long term view on the stock.

[00:01:42] Doug McIntyre: So I think it’s taken its haircut for bad sales, China, EU here. Now it gets this advantage and I think President Trump is willing to take a lot of pain on this. So I, I think if he doesn’t get the, the countries that this is aimed at, which is particularly Europe and Canada, Mexico, obviously, um, this price problem in the automotive industry is not gonna go away.

[00:02:11] Lee Jackson: No, and like you said, with a competitive advantage like that, and I, I think the whole, you know, two years ago, Elon Musk was the darling of the left, and now he’s some sort of fascist because he is trying to point out where there’s government waste and fraud. And I think there’s kind of a backlash building against these people that are, you know, keen and destroying and firebombing Tesla dealerships.

[00:02:39] Lee Jackson: I think there’s gonna be a little backlash from citizens in the United States are like, Hey, hey, wait a minute. This guy was your champion of clean air. Now you hate him and he is a fascist. I think that could add to the, to the people saying, Hey, I’m gonna go buy me a Tesla now.

[00:02:53] Doug McIntyre: Yeah. So I like Tesla at this level, and I like it because problems are already baked into the price.

[00:03:03] Doug McIntyre: Yeah. And if these tariffs are in place for any period of time, particularly once you get past 60 or 90 days when you. You, you’ve run very low on the, the cars you’ve already made.

[00:03:13] Lee Jackson: Right. Inventory. Right, right.

[00:03:15] Doug McIntyre: That’s the point at which is competitors start to get hit. So, yep. Yeah. At at this level, I’m a Tesla liker.

[00:03:22] Lee Jackson: Yeah. And you would think that, and we’re starting to see it already, the major car companies, whether it’s the Big Three or, or even Honda and some other dealers or some other brands, they’re moving production back into the United States. They’re like, look, we, we can’t have this sort of Damocles tariff thing hanging over our head for years.

[00:03:41] Lee Jackson: We’ll just, but you just can’t move that kind, that kind of plant back quickly. So it’s gonna take some time.

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