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The electric car company led by Elon Musk builds all the cars it sells in the United States in California and Texas, shielding it from tariffs that could devastate competitors.
Tesla CEO Elon Musk speaking at the grand opening for a new $1.1 billion manufacturing facility in Austin, Texas, in April 2022. Credit… Jay Janner/Austin American-Statesman, via Associated Press March 8, 2025, 12:01 a.m. ET
As President Trump puts new tariffs on goods from China and threatens a trade war with allies like Mexico and Canada, one global company is likely to suffer less than most of its competitors: Tesla.
But the electric car maker led by Elon Musk, which accounts for a third of the billionaire’s wealth, is also vulnerable if relations with China worsen. That country is the company’s second-largest market after the United States and it produces more cars there than anywhere else.
Tesla has built largely self-sufficient supply chains in the United States and China, a rarity in a world of interconnected trade. As a result, the tariffs imposed by the Trump administration on Chinese goods, and the continuing threat to put them on Mexican and Canadian products, might help Tesla by hurting its competitors more.
Although there is no evidence that Mr. Musk is shaping trade policies, the tariffs are one of several measures adopted by the Trump administration that may benefit Tesla at the expense of its rivals. On Wednesday, Mr. Trump paused 25 percent tariffs on most autos and parts made in Canada and Mexico, but the reprieve expires in a month, leaving automakers in the United States that depend on foreign supply chains in a state of uncertainty.
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The Tesla factory in Austin, Texas, in 2023. Cars produced here will be shielded from tariffs that will hurt Tesla competitors. Credit… Go Nakamura/Reuters The administration is also trying to eliminate financial support for the construction of fast-charging stations for electric vehicles, a move that could handicap companies seeking to compete with Tesla’s extensive network. And it is attempting to cut or eliminate loans and subsidies that competitors like Ford Motor and Rivian are using to finance electric vehicle and battery factories.
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