Elon Musk’s Tesla is positioned to gain significantly compared to other automakers due to President Trump’s recent tariff strategy.
Since April 2, Donald Trump has been advocating for his ‘liberation day’ and economic strategies which he claims will ultimately benefit Americans.
However, before these plans are fully implemented, the White House has outlined that the Trump administration intends to impose tariffs that will affect the automotive sector.
In late March, the administration declared a 25 percent tariff on imports of ‘automobiles and certain automobile parts’.
In a recent development, the White House disclosed that there is a provision for car manufacturers to gain exemption from the tariffs, which conveniently benefits Elon Musk’s Tesla.
On April 29, a fact sheet was released explaining their strategy to potentially boost car production within the United States.
The fact sheet states: “President Donald J. Trump signed a proclamation to protect national security by incentivizing domestic automobile production and reducing American reliance on imports of foreign automobiles and their parts.”
The proclamation adjusts the tariff policy on automobiles and parts by encouraging manufacturers to assemble their vehicles in the U.S., thereby decreasing the nation’s dependency on foreign automotive imports.
Car companies that manufacture vehicles with 85 percent or more domestic content will be fully exempt from these new tariffs.
Currently, only one company meets this criterion—Tesla.
According to Fuel ARC, three Tesla models, namely the Tesla Model Y, Tesla Model Y Long Range, and the Model 3 Performance, satisfy the specific requirement of at least 85 percent domestic content.
Ford’s Mustang GT AT, GT 5.0L, and GT Coupe Premium have 80 percent domestic content, while Honda’s Passport AWD is close with 76.5 percent.
Some Tesla models, such as the Cybertruck with 82.5 percent domestic content, and the Model S and Model X, both having 80 percent, do not meet the exemption criteria.
This move has sparked criticism on social media, with accusations of favoritism towards Musk and Tesla.
In an online discussion about the exemption, a Reddit user commented: “’Oh c’mon, there’s literally a multi-month difference between when Musk gave Trump $290 million and when the government started doing things that explicitly benefit him. There’s no way you can legitimately say that the two are related.’ – Most of my relatives, probably.”
Another added: “What an amazing coincidence! This is.”
With a third stating: “I’ll be in the market for a car soon, I’ll give you 1 guess which company won’t be on my list.”
Another user remarked: “I’m in San Francisco this week for the first time since early last November. Back then almost every 3rd car was a Tesla and now I barely see any.”