Musk’s Tesla Is Huge Winner With Trump Tariffs
Read between the lines. The Trump Administration did not impose a 25% tariff on all autos made by companies based outside the US. He placed tariffs on cars and car parts made outside America. The biggest winner under the new rules is Elon Musk’s Tesla, which makes its cars in the US. Musk also relies on relatively few imported parts.
Musk’s competition will be crushed in many cases. Hyundai/Kia, Mercedes, and BMW rely heavily on imported vehicles and parts. Even GM gets over a third of its parts and cars outside the US.
Tesla Favorable Math
Tesla has lost ground in the US. Some feel this is because of his relationship with President Trump. Some think it is because or recalls. Some others think it is because of the high prices of its cars. Whatever the reason, Tesla’s EV market share has dropped below 50% after being well above that for years.
Hyundai/Kia has succeeded in taking market share from Tesla. It has almost 10% of the American market. It will need to increase its EV prices significantly to profit; higher prices probably mean fewer buyers. The South Korean company has built the factory infrastructure to grow its US EV sales. Management could never have known, but that was a mistake.
BMW And Mercedes Too Expensive
BMW and Mercedes each have models that compete with Tesla’s highest-priced cars. They will also need to raise prices to maintain profit margins. The math may be that they cannot sell many cars in the US at all.
Musk was dealt the best hand in the car industry.
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