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Trump said on Wednesday that the newly announced duties could be neutral or even beneficial for Tesla, adding that Musk did not advise him on auto tariffs.
Shares of Tesla, Inc. fell more than 5% on Wednesday, snapping a five-session winning streak, and slipped further after-hours as President Donald Trump unveiled 25% tariffs on auto imports.
Although analysts and investors have suggested that Tesla could avoid the impact of Trump's tariffs since it produces nearly all U.S.-sold cars domestically, CEO Elon Musk warned otherwise on Wednesday.
On X (formerly Twitter), Musk responded to user posts claiming Tesla could benefit the most from these regulations and that legacy automakers such as Ford, General Motors, and Stellantis struggle to adapt quickly.
"To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial," Musk said.
"Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant," he added.
However, Trump said on Wednesday that the newly announced duties could be neutral or even beneficial for Tesla, adding that Musk did not advise him on auto tariffs.
On Stocktwits, sentiment for Tesla dipped on Wednesday but remained in the 'bullish' zone amid a 7% uptick in message volume.
Several users focused on Tesla entering the Saudi Arabian market and pointed to analysts saying it would be "least exposed" to the new duties.
One optimist predicted the stock would hit $283 on Thursday, which implies a 5% jump from the last close.
A Bloomberg report, citing a 2024 NHTSA filing, noted that 60% to 75% of Tesla's components are made in the U.S., depending on the model, with most of the rest coming from Mexico.
However, since the value of imported parts is unclear, the financial impact of the tariffs on Tesla remains uncertain.
The EV giant's most bullish cheerleaders on Wall Street have echoed Musk's comments that robotics and autonomous driving would be Tesla's biggest value drivers in the long term.
However, the company and Musk have faced public backlash over his involvement with the Trump administration, particularly with his controversial political statements and efforts to cut federal spending.
Tesla stock is down about 30% this year.
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