Investing.com -- As the stock market weighs the fallout from President Trump’s 25% tariffs on all foreign-made cars and light trucks, Tesla is a rare bright spot.
Tesla's (NASDAQ:TSLA) stock is up 4% in midday trading on Thursday.
Despite the gains, Tesla CEO Elon Musk said his company may still face challenges even though the vehicles are the “most American-made cars" on the road.
“Important to note that Tesla is NOT unscathed here,” Musk said. “The tariff impact on Tesla is still significant.”
“To be clear, this will affect the price of parts in Tesla cars that come from other countries,” Musk added. “The cost impact is not trivial.”
Reporters asked President Trump about the impact of the new auto tariffs on Tesla, and the president responded that he would expect them to be neutral or positive.
“It could be a net neutral, or they may be good,” Trump said about the impact on Tesla. “He has a big plant in Texas. He has a big plant in California. And anybody that has plants in the United States, it's going to be good for, in my opinion.”
Earlier in the month, Trump purchased a Tesla vehicle at the White House to support Musk, who has been facing backlash for his involvement in DOGE-led government job cuts.
On Wall Street, several analysts said they expect Tesla to be the clear winner from the news.
“Tesla a relative beneficiary given 100% US production footprint, substantial US sourcing and with Model Y competing in a midsize crossover segment where close to ~50% of vehicles could be subject to tariffs,” TD Cowen analyst Itay Michaeli commented following the tariff news.
Elsewhere, Bernstein analyst Daniel Roeska said Tesla wins while Detroit bleeds.
“Tesla is the clear structural winner: localized, strong market share, better insulated from trade risk,” Roeska commented. “For everyone else, this is a margin reset and real drag on near-term earnings power.”
In addition to benefits due to its U.S. manufacturing footprint, news that Trump will ask Congress to pass a bill to make interest payments for cars made in the U.S. tax deductible is also seen as a positive for the company.
