President Donald Trump campaigned on a promise to slap tariffs on goods from many top trading partners. Elon Musk’s electric vehicle company may feel some of the pain.
During Tesla’s earnings call on Wednesday, Chief Financial Officer Vaibhav Taneja said the company’s profitability could take a hit if the new administration implements tariffs.
“Over the years we’ve tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses,” Taneja said. He said the “imposition of tariffs” would “have an impact on our business and profitability.”
President Trump, who returned to the White House last week, is weighing tariffs on China, Mexico and Canada in an effort to protect U.S. business interests.
Tariffs were a popular tool in the first Trump administration, and were used on goods including solar panels, steel and aluminum. It remained a major talking point on the campaign trail. The president has touted a 60% tariff on China, and over the weekend threatened Colombia with a 25% tariff on goods coming into the U.S.
Musk was Trump’s biggest backer, pouring $277 million into his campaign and in support of other Republican candidates. Musk is now running the Department of Government Efficiency (DOGE), and many analysts have speculated that his tight relationship with the president could benefit his companies.
Tesla shares have soared 55% since Trump’s election victory in early November. The stock rose another 4% in extended trading on Wednesday even though Tesla reported weaker-than-expected earnings and revenue for the quarter.
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