While President Trump sets new rates from China and threatens a trade war with allies such as Mexico and Canada, a worldwide company will probably suffer less than most of its competitors: Tesla.
But the electric car manufacturer led by Elon Musk, who is good for a third of the riches of the billionaire, is also vulnerable if relations with China deteriorate. That country is the second largest market in the company after the United States and produces more cars there than anywhere.
Tesla has largely built up self -sufficient supply chains in the United States and China, a rarity in a world of interconnected trade. As a result, the rates imposed by the Trump administration on Chinese goods, and the constant threat to put them on Mexican and Canadian products can help Tesla by hurting its competitors more.
Although there is no evidence that Mr. Musk is trading policy, the rates are one of the various measures taken by the Trump administration that can benefit Tesla at the expense of his rivals. On Wednesday, Mr Trump paused 25 percent rates for most cars and parts made in Canada and Mexico, but the delay ends in a month, so that car manufacturers in the United States depend on foreign supply chains in a state of uncertainty.
The administration also tries to eliminate financial support for the construction of fast charging stations for electric vehicles, a movement that companies can compete that wanted to compete with the extensive network of Tesla. And it tries or eliminate loans and subsidies that use or eliminate competitors such as Ford Motor and Riviaan to finance electric vehicles and battery factories.
Mr. Musk has said almost nothing about the trade or the crusade of the administration to promote fossil fuels and to hinder the sale of electric vehicles that can also harm Tesla. And his support for Mr. Trump has inspired protests with Tesla dealers and weighed on the stock price of Tesla. But his position as de facto member of Mr. Trump's cabinet gives him influence that is far over another car director.
“Conflicts of interest here is very mild,” said John Helveston, a university teacher at George Washington University who gives engineering management.
Tesla did not respond to a request for comment. An official from the White House said that the policy prior to the support of Mr. Musk for Mr. Trump.
“President Trump consistently had the policy for killing electric vehicles on the Biden campaign track since the summer of 2023 more than a year before Elon Musk has ended President Trump and he consistently forced companies to make their products made in America since he first walked a spokes for the president,” said Kush.
The trade war and other Trump policy certificate also have risks for Tesla when the company is already in a crisis, with sales in China and Europe, even if the general market for electric vehicles rises.
The extensive investments of Mr. Musk in China make him vulnerable because trade tensions between the Chinese government and the Trump government come up.
“He could become a pawn in all this,” says Lei Xing, an independent car analyst based in Massachusetts aimed at China.
Tesla is already struggling in Europe and China because of competition from Chinese electric car manufacturers and a lack of new models. Anger about the political activities of Mr. Musk, including promotion of extreme right -wing parties, has also damaged the question in Germany, the United States and other markets. The personal wealth of Mr. Musk is tied up in Tesla Stock, who has had a steep decline.
When Tesla started California in a factory in a factory in a factory in a factory in a factory in a factory in a factory in a factory, it designed a supply chain that was less dependent on the import then almost all its competitors. Electric vehicles were then a new technology, forcing Tesla to largely develop its own sources of batteries, engines and other components.
Tesla built a battery factory in Nevada in collaboration with Panasonic from Japan, and it remains one of only a few car companies to produce batteries in the United States en masse.
When Mr. Musk started talking about building a factory in China in 2014, he received a warm welcome from government officials. Tesla opened a factory in Shanghai six years later under unusually favorable conditions. Beijing changed the rules of ownership so that the company could set up without a local partner, a first for a foreign car maker in China. The Chinese government also caused loans with low interest rates, access to top leaders and even changes that Tesla had searched for emission rules.
But Mr. Musk kept the delivery chains relatively separate for the Chinese and American factories, in contrast to other car companies that are highly dependent on imported parts.
“He has set himself up nicely in the event that the trade goes sideways and the rates go higher,” says Michael Dunne, an old Chinese automotive consultant. “And that serves him well today.”
Nowadays the cars in Shanghai are sold in Europe, Southeast Asia or on the domestic Chinese market – but not in the United States.
The cars that Tesla sells in the United States are made in factories in Fremont and Austin, Texas. Tesla also produces charging equipment for its own loading network-the largest in the Land-in Buffalo, NY Tesla regularly has an annual ranking of Cars.com, an online shop site, how much of a vehicle in America is made.
“Tesla is in a good position” to resist rates, said Patrick Masterson, who supervises the compilation of the data that go in the Cars.com ranking. “Their domestic production is robust.”
Tesla is still vulnerable to rates on goods from China and Mexico, because a quarter of the components and materials measured by value is imported, according to data collected by the National Highway Traffic Safety Administration. But electric vehicles made by Tesla's competitors are much more vulnerable to rates.
Chevinox Sport Utility vehicle from General Motors is made in Mexico, for example. With a starting price of $ 34,000, the battery-driven equinox is a threat to the Tesla model Y, which starts at $ 45,000 before the government stimuli. The 25 percent rate of the Trump administration will erase the majority of that advantage, assuming it stands.
The risk for Tesla in China is more difficult to gauge. Until now, Chinese leaders seem to see the role of Mr. Musk in the Trump government as a plus and consider him a potential contact point. In January, when Han Zheng, vice -president of China, flew to Washington to attend Mr Trump's inauguration, he met Mr. Musk.
“The US-China policy has often been operated on through specific personal relationships,” said Ilaria Mazzocco, a senior fellow in Chinese business and economy of the Center for Strategic and International Studies, a think tank in Washington. “There is hope in China that he could play a constructive role.”
But Mr. Musk has also lost some negotiating power in China.
When Chinese leaders the Shanghai factory green light, Tesla was seen as a technology leader who would stimulate the development of the EV industry. With the turnover that fell and weakened in China in Europe, the production of Tesla in Shanghai fell by 50 percent in February of a year earlier. Chinese car manufacturers such as BYD and Xiaomi introduce new models that compete in functions such as autonomous driving.
Tesla's prestige and leverage in China can be reduced.
“Tesla can no longer control China,” said Jia Xinguang, an independent car analyst in Australia. “But China, on the other hand, can control Tesla.”
Yet China would probably think twice before he focuses on Tesla and Mr. Musk because this could make this more difficult to attract foreign investments, said Wang Yanhang, a fellow at the Chongyang Institute for Financial Studies at Renmin University in Beijing that follows trade issues. “China will not shoot herself in the foot,” he said. “It's the last option.”
So far, China has arisen from cars when taking revenge on the rates of the Trump government on Chinese goods, instead to set up tasks on American agricultural products such as chicken and wheat.
Tesla has quietly fought at at least one potential rate on Chinese materials that would have a direct impact on competitiveness.
China is the most important source of highly pure graphite, an essential material for batteries. In December, a group of companies trying to produce battery graphite in the United States in the United States to dump China Van Dumping and asked the American International Trade Commission to impose punitive tasks that could be more than 800 percent.
During a hearing on the issue in January, Tesla hired a prominent law firm in Washington to argue the case, and four Tesla leaders spoke according to public documents. Tesla is “pushing back because they don't see an alternative to the Chinese graphite,” said Iola Hughes, head of research at RHO Motion, who follows the battery industry.
Last month, the Handelsbureau said that there was a “reasonable indication” that the Chinese export of graphite US producers caused damage. The agency has not made a final decision. Mr. Trump's rhetoric about trade has not included any reports of graphite.
Joy Dong contributed reporting.
