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President Donald Trump is considering temporary exemptions or delays on the 25% tariffs he imposed on the automotive industry, including on imported vehicles and parts. The potential relief comes after tariffs on finished vehicles took effect at the start of April, with duties on auto parts expected to begin in May. This creates pressure from automakers facing disruption to their complex global supply chains.
The Trump administration is reportedly working on rules that would exempt the value of automotive components containing U.S.-sourced materials from tariffs, including potential carve-outs for parts certified under the United States-Mexico-Canada Agreement (USMCA).
Industry leaders and economic analysts warn that even temporary exemptions may not allow automakers to alter supply chains developed over decades. The tariffs have already caused disruptions and increased costs for manufacturers, with experts projecting that consumers could see price increases of several thousand dollars at dealerships.
This move follows Trump’s recent temporary suspensions of tariffs on electronics and a 90-day pause on broader reciprocal tariffs announced earlier this year – decisions that appeared aimed at mitigating economic and political fallout.
While Wall Street has largely priced in some impact from the automotive tariffs, analysts suggest that prolonged implementation without substantial exemptions could lead to downward revisions in the sector’s earnings projections.
Let’s see if Tesla (TSLA) stock is a buy, sell, or hold as Trump floats auto tariff exemptions.
Is Tesla Stock a Good Buy Right Now?
The ongoing tariff war has dragged TSLA stock down by 50% from its 52-week high. The automaker faces additional challenges, including brand deterioration, declining European deliveries, and increased global competition in the EV market. CEO Elon Musk’s political activities and role as a Trump adviser have further complicated Tesla’s position internationally.
Tesla reported 336,681 vehicle deliveries in Q1 2025, a 13% decline from last year, falling well short of analyst expectations. It produced 362,615 vehicles during the quarter, with the majority being its popular Model 3 and Model Y vehicles. Analysts had expected deliveries between 360,000 and 370,000. Wedbush analyst Dan Ives called the results a “disaster on every metric” and a “fork in the road moment” for the company.
In the last five years, Tesla’s revenue has grown at an annual rate of 31.8%. Comparatively, analysts expect the annual top-line growth to decelerate to 19.9% between 2024 and 2029. Like other auto manufacturers, Tesla is focused on expanding its profit margins and is forecast to increase EBITDA margins from 17% in 2024 to 22.4% in 2029.
Tesla bulls are banking on the company gaining traction in other growth verticals, such as autonomous driving, robotics, and artificial intelligence. Out of the 41 analysts covering Tesla stock, 16 recommend “Strong Buy,” three recommend “Moderate Buy,” 12 recommend “Hold,” and 10 recommend “Strong Sell.” The average target price for Tesla stock is $306.22, indicating upside potential of 50% from current prices.
