Tesla’s stock price plummets by over 10% as Trump’s tariff policy takes a devastating toll on the electric car industry, threatening to disrupt global supply chains and give rival automakers like BYD an advantage.
In early trading on Monday, shares of Tesla plummeted by more than 10% before rebounding to a loss of four to five percent. This sudden drop in stock price is a sobering indicator, given that Tesla was initially seen as one of the few automakers expected to benefit from President Trump‘s aggressive tariff policy.
Tesla, Inc. is an American electric vehicle (EV) and clean energy company founded in 2003 by Elon Musk.
The company has revolutionized the automotive industry with its innovative designs and sustainable technologies.
Tesla's Model S was the first luxury EV to gain widespread acceptance, followed by the Model X and Model 3.
According to a report, over 1 million Teslas have been sold worldwide as of 2022.
The company's mission is to accelerate the world's transition to sustainable energy through its vehicles and solar panel products.
The Tariff Policy: A Double-Edged Sword
Trump‘s tariffs on imported cars are expected to have a significant impact on Tesla‘s business. However, it’s worth noting that all Tesla‘s cars are manufactured in the US, and therefore, the company is not directly affected by the tariffs. Nevertheless, the tariffs also apply to car parts, which some of these parts are imported, raising production costs for Tesla.
The Consequences of Tariffs on Tesla‘s Sales
The consequences of the tariffs on Tesla‘s sales cannot be overstated. With a reported 13% drop in first-quarter deliveries, Tesla is now on track to have an even worse year than it did in 2024, when it experienced its first decline in sales in history. Analysts are taking this as a damning sign of the ‘unprecedented brand damage’ Tesla has suffered.
A Shift in Investor Sentiment
Even die-hard investors are starting to see the writing on the wall. Noted Tesla bull Daniel Ives, a Wedbush Securities analyst, cut his price target for Tesla in half, downgrading it from $550 to $315. This is a stark contrast to his previous optimism about Tesla‘s prospects.
The Tariff Fallout: A Threat to Tesla‘s Global Footprint
The fallout from the trade war could see more Chinese consumers turn to domestic options, which would be a significant blow to Tesla‘s global footprint. Analysts fear that the tariffs in their current form will disrupt Tesla and its overall supply chain, giving rising competitors like BYD an advantage.
The Rise of BYD: A New Challenger
BYD has already overtaken Tesla as the largest EV maker in the world, in terms of sales and revenue. With the tariff fallout, BYD could now lengthen its lead over Tesla, making it a significant threat to the company’s dominance in the electric vehicle market.
BYD (BYD) is a Chinese multinational company that specializes in electric vehicles, rechargeable batteries, and solar panels.
Founded in 1995 by Wang Chuanfu, BYD has become one of the largest electric vehicle manufacturers globally.
The company's flagship models include the Tang, Han, and Song series.
BYD has also made significant investments in battery technology, with a focus on solid-state batteries for improved efficiency and range.
The Future of Tesla: Uncertain and Volatile
As the situation with Trump‘s tariffs continues to unfold, one thing is clear: Tesla‘s stock price will remain highly volatile. With investors cutting their price targets and analysts warning of unprecedented brand damage, it remains to be seen whether Tesla can recover from this latest setback.
The author is Frank Landymore
- futurism.com | Tesla Is Getting Disemboweled by the Tariffs
