Trump calls auto tariffs 'maybe good for Tesla,' Musk says 'not unscathed'

The auto tariffs are set to take effect on April 2, with collection beginning April 3, as confirmed by the White House

US President Donald Trump on Thursday (IST) announced that he would impose a 25 per cent tariff on all automobiles not manufactured in the country. While making the announcement, Trump also said that Tesla CEO and close aide Elon Musk had not expressed an opinion on the policy because he "may have a conflict."

 

Trump further noted that Musk had never sought any business favours from him. The President also mentioned consulting major automakers about the policy, asserting that the tariffs would be “net neutral or maybe good for Tesla." He further mentioned Tesla’s assembly plants in Austin, Texas, and Fremont, California, stating that “anybody that has plants in the United States — it’s going to be good for them", CNBC reported.

 

 

Following Trump’s announcement, Musk acknowledged the significant impact the tariffs would have on Tesla. In a post on X, he said, “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.” 

Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.

— Elon Musk (@elonmusk) March 27, 2025

Recently, in a letter to the US Trade Representative, Tesla said that “even with aggressive localisation” of its domestic supply chain, “certain parts and components are difficult or impossible to source within the United States." The company urged the USTR to “consider the downstream impacts of certain proposed actions taken to address unfair trade practices."  Read: Trump calls auto tariffs 'maybe good for Tesla,' Musk says 'not unscathed'

Trump's tariffs on imported automobiles  

 

Trump’s decision to impose a 25 per cent tariff on all imported automobiles marks a major shift in US trade policy. The White House confirmed that the tariffs will take effect on April 2, with collection starting on April 3.

 

“This will be permanent,” Trump said from the Oval Office. “We start off with a 2.5 per cent base, which is what we’re at, and go to 25 per cent.”

 

Trump said the move would drive economic growth, adding, “This will continue to spur growth like you haven’t seen before. But if you build your car in the United States, there is no tariff.”  

 

The announcement comes just days before Trump is set to unveil a broader set of trade measures. On April 2, a date he has dubbed “Liberation Day," he plans to introduce a range of reciprocal tariffs targetting imported goods that his administration claims are unfairly taxed by US trading partners.  

 

The President had initially floated the idea of a 25 per cent tariff on imported vehicles in February without providing specifics. Then, on Monday, he hinted that the new levies on the auto industry would be introduced “in the very near future." 

Read: Tata Motors, Motherson Sumi, others slip upto 7.5% on Trump 25% auto tariff

Will Tesla emerge as the biggest winner amid Trump’s tariffs?

As Trump’s auto tariffs are set to take effect on April 2, many automakers are bracing for losses. However, Tesla Inc. stands out as a major beneficiary, Bloomberg reported.

 

With large manufacturing facilities in California and Texas, Tesla produces all the vehicles it sells in the US, shielding it from the 25 per cent tariffs Trump has imposed on imported cars and key components, the news report said. However, major competitors such as South Korea’s Hyundai Motor Co., Germany’s Volkswagen AG, and even America’s General Motors Co. will soon face significantly higher costs.

 

Tesla’s reliance on domestic production makes it the “least exposed” to the new tariffs, according to CFRA Research analyst Garrett Nelson. In an analysis this week, Nelson highlighted Tesla’s strategic advantage, while the company itself reinforced this point in a post on X, stating that its models “are the most American-made cars". 

Attack on Tesla service centre 

A Tesla service centre in Las Vegas became the target of a violent attack last week, with multiple vehicles set on fire and shot at, according to a CNN report. The incident, which took place at the Tesla Collision Centre, resulted in damage to at least five vehicles, two of which were completely engulfed in flames. The FBI has launched an investigation, stating that the attack bears "some of the hallmarks" of terrorism.  

 

The word "RESIST" was spray-painted on the front doors of the facility. The FBI's Joint Terrorism Task Force and the Las Vegas Metropolitan Police Department are working together to identify the suspect.

 

Tesla CEO Elon Musk strongly condemned the attack, describing it as "terrorism" and calling the level of violence "insane and deeply wrong".

 

The incident is part of a broader pattern of attacks on Tesla properties and vehicles across the US. Media reports indicate cases of vandalism, graffiti, and even shootings targetting the company.  

 

Musk part of Trump’s inner circle

 

Musk serves as a senior advisor to Trump and has contributed nearly $290 million to support Trump's return to the White House. While continuing to lead his companies, Musk also heads the Department of Government Efficiency (DOGE), an initiative aimed at reducing federal spending, downsizing personnel, and consolidating or eliminating various government agencies and services.  

 

Earlier this month, Trump temporarily transformed the South Lawn of the White House into a Tesla showroom. The automaker delivered five electric vehicles for the President to inspect, following his post on Truth Social in which he announced plans to buy a Tesla to show his support for Musk and the company. Standing beside Musk, Trump called the cars “beautiful," and specifically praised the angular, steel design of the Tesla Cybertruck.    (With agency inputs)