Tesla share price: How would Donald Trump’s tariff impact Elon Musk’s auto major?

Tesla share price surged over 5% on Wednesday, closing at $282.76 per share, ahead of an anticipated trade policy announcement by US President Donald Trump. However, during extended trading hours, Tesla stock price dipped more than 3%, mirroring a broader decline in US stock futures.

Trump Tariffs on Auto & Its Impact

Trump’s newly imposed 25% tariff on US auto imports, which took effect shortly after midnight in Washington, is expected to disrupt global automotive supply chains and increase vehicle prices. Additional duties on certain auto parts will follow by May 3, potentially adding thousands of dollars to car costs and affecting sales.

While Tesla primarily manufactures vehicles domestically, the company depends on imported components and raw materials, making it vulnerable to higher costs due to these tariffs. The new policy is part of a broader trade strategy that includes a 10% reciprocal tariff on all imports to the US, along with specific duties targeting around 60 nations.

Tesla’s Strategy to Counter Tariff Pressures

Industry experts suggest that Tesla could mitigate some of these challenges by ramping up domestic production. Elon Musk has pledged to double Tesla’s production to reduce reliance on imported parts. However, scaling manufacturing comes with challenges, such as securing supply chains, expanding facilities, and maintaining quality standards.

“Tesla could hope that negotiated trade agreements resulting from the tariffs would reduce barriers to entry and give it access to other markets, such as India. With sales down in Q1 and intensified competition from abroad, Tesla’s outlook will be heavily influenced by the new tariffs and any escalation of the trade wars. It will also be influenced by its ability to scale production and navigate the operational challenges that come with this and heightened competition from abroad,” said Ross Maxwell, Global Strategy Operations Lead, VT Markets.

Tesla Stock Price Outlook

Despite recent volatility, Tesla share price remains strong on technical charts.

“Tesla share price has hit our previous short-term target of $265 to $270 apiece, and the Elon Musk-owned stock is still looking positive on the technical chart. So, Tesla shareholders are advised to hold the scrip, maintaining a stop loss at $250, for the short-term targets of $297 and $320,” said Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi.

According to him, on breaking above the $320 apiece zone, we can expect Tesla stock price to become highly bullish and reach the $380 apiece mark.

Tesla share price has declined by over 25% year-to-date (YTD). However, over the past six months, Tesla stock price has gained 17.5%. On a one-year basis, Tesla shares have surged 68%, while over the last five years, the Electric Vehicle (EV) stock has delivered an impressive 785% return, solidifying its status as a multibagger investment.

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