President Donald Trump’s much-anticipated “Liberation Day” has arrived, and the world seems to have gone into frenzy as markets brace for the impact of the additional tariffs. Investors, in particular, are keen to understand how (or if) “Liberation Day” will be a game changer for the already beaten-down Tesla (TSLA) stock. The electric vehicle (EV) maker’s stock is trending down 2.2% in pre-market trading at the time of writing.
Tariffs to Shape the Road Ahead for Tesla
Trump is expected to announce a series of new tariffs on a wide range of product categories from various countries at a Rose Garden event today at 4 p.m. Eastern Time. Last week, Trump announced 25% tariff on import of foreign-made vehicles, dragging down stocks of legacy automakers Ford (F) and General Motors (GM), as they manufacture some of their renowned auto models in Mexico and China. The collections on the auto tariffs are expected to begin tomorrow, April 3.
Interestingly, Tesla is believed to have the least impact from these auto tariffs, since it domestically assembles all the autos it sells in the U.S. However, CEO Elon Musk clarified that Tesla is “Not Unscathed” from the tariffs, since it imports several parts such as batteries and components from China. These levies are poised to increase the input cost of raw materials, which could very well be passed on to the end consumers in the form of higher EV pricing.
Moreover, tariffs could impact global supply chain and logistic channels, further hampering the assembly of auto parts in the U.S. Tesla depends on international supply chains to bring certain components into the country, a disruption in this system could delay the production of automobiles.
On the brighter side, Trump has already imposed hefty tariffs on imported autos and could potentially exclude the sector from the new tariffs being announced today. In such a scenario, Tesla could indeed end up being one of the least-impacted stocks from “Liberation Day.” Given that the market is already aware of the potential consequences of auto tariffs, and in the absence of any surprise, Tesla’s stock could reverse course and start surging after the “Liberation Day.” It’s a wait-and-watch game until 4 p.m. EST today, as no one, not even Trump, knows what to expect from the markets today.
April 2 Could be Make-or-Break for Tesla
Tesla is expected to release its highly anticipated production and delivery numbers for the first quarter of 2025 today. Experts predict that Tesla could miss delivery estimates owing to the ongoing headwinds. Notably, Tesla’s auto sales slumped in European countries in both January and February, and March could be no different. France witnessed a 36.8% decline in Tesla’s auto sales in March alone.
TSLA stock has declined 33.5% so far in 2025, driven by severe backlash for CEO Elon Musk’s political choices. His role as the head of the DOGE (Department of Government Efficiency) committee and related federal workforce cuts have enraged American consumers.
Meanwhile, China remains one of the key markets for Tesla. However, the company is facing sluggish demand for its EVs in the mainland owing to stiff competition from domestic player BYD (BYDDF) and the heated price war.
What Is the Price Target for Tesla Stock?
Analysts prefer to remain on the sidelines on Tesla stock until the dust settles. On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 11 Holds, and 12 Sell ratings. Also, the average Tesla price target of $315 implies 17.3% upside potential from current levels.
