Elon Musk Denies That Tesla Will Uniquely Benefit From Donald Trump’s 25% Tariff on All Vehicles Imported into the U.S. – Musk Says, “The Tariff Impact on Tesla is Still Significant”

Tesla fans celebrated President Donald Trump's recent announcement that the U.S. will impose a 25% tariff on all vehicles imported into the country.

Since Tesla manufactures all the vehicles it sells in the U.S. at its plants in Fremont, California, and Austin, Texas, Tesla fans were pleased with the tariffs. They believe that this would increase costs for other automakers while keeping Tesla’s costs unchanged, thus giving the EV maker a competitive advantage.

However, a few hours ago, Elon Musk unexpectedly came forward and repeatedly denied that Tesla would benefit from this tariff.

Musk made these comments in response to Tesla fans who were celebrating the news.

The Tesla Owners Silicon Valley account on X wrote…

“BREAKING: Trump imposes 25% tariff on all cars not made in the United States."

Tesla could benefit the most from this.”

Another Tesla online personality and investor, Sawyer Merritt, also shared similar thoughts, writing…

“Today, Trump introduced a 25% tariff on ALL vehicles not made in the United States.

This tariff will go into effect on April 2nd. About 40% of all new cars sold in the US are imported, so this tariff is a big deal.

This is a breakdown of where cars sold in the US are made:

• Tesla: 100% U.S.

• Ford: 77% U.S., 21% Canada & Mexico, 2% Other

• Stellantis: 57% U.S., 39% Canada & Mexico, 4% Other

• Nissan: 52% U.S., 31% Canada & Mexico, 17% Other

• GM: 52% U.S., 30% Canada & Mexico, 18% Other

• Toyota: 48% U.S., 27% Canada & Mexico, 25% Other

• Kia: 33% U.S., 8% Canada & Mexico, 59% Other

• Volkswagen: 21% U.S., 43% Canada & Mexico, 36% Other

If the 25% tariff remains in place for a long period, legacy automakers will struggle to adapt quickly, leading to a significant decline in profits.

The United States is the most profitable country for the auto industry. Trump said this new tariff will be permanent, so it will be interesting to see how this plays out and whether the tariff sticks around or not.”

Tesla’s vehicles sold in the US are 100% made in the US. In comparison, Ford ranks second with 77% of its vehicles produced domestically, while Volkswagen is a distant tenth, with only 21% of its vehicles sold in the US manufactured locally.

Based on these numbers, all of Tesla’s competitors will face a 25% tariff on at least a portion of the vehicles they sell in the U.S., which gives Tesla a significant competitive advantage.

However, Musk cautions Tesla fans not to view the tariffs as purely advantageous for Tesla.

In response to Sawyer Merritt, Elon Musk writes…

“It is 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

Not satisfied with this clarification, Musk reiterated his point to Tesla Owners Silicon Valley writing…

“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.”

To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.
— Elon Musk (@elonmusk) March 27, 2025

What Musk is highlighting here is that although all of Tesla’s vehicles are assembled in the U.S., the vehicles consist of thousands of parts that are imported from other countries.

However, even putting this fact into consideration, Tesla still has the most American-made vehicles when looking at the percentage of the components built in the US.

This means that although the tariffs will raise Tesla’s cost of goods sold, they will raise costs for Tesla’s competitors even more.

What’s not clear here is that given that Tesla has done a great job localizing manufacturing to the areas where it sells its vehicles, this seems like a great opportunity for Musk to point out Tesla’s advantage and celebrate the EV maker’s foresight.

However, Musk appears determined to prove that the tariffs will significantly harm Tesla. This doesn't make sense to me; however, please let me know what you think in the comments.

Share your ideas by clicking the “Add new comment” button below. Also, make sure to visit our site, torquenews.com/Tesla, regularly for the latest updates.

Image: Screenshot from KATU News on YouTube

For more information, check out: Several Tesla Cybertruck Owners Share They’re Experiencing Stability Issues at High Speeds – One Owner Says, “I Love the Truck, but I’m Getting a Strong Wobble Starting at 70 MPH, Which Gets Pretty Intense at 80 & 90 MPH”

Tinsae Aregay has been following Tesla and the evolution of the EV space daily for several years. He covers everything about Tesla, from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.