Tesla (TSLA) has been grinding up against a policy wall. The electric vehicle giant’s momentum has been steadily chipped away by President Donald Trump’s steep new tariffs, with the latest round hitting just as Tesla was trying to regain its footing. Now investors are left rethinking whether Tesla is still a buy despite the growing trade blowback.
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The U.S. slapped up to 145% tariffs on Chinese auto imports earlier this month. That spelled trouble for Tesla, whose upcoming Cybercab and Semi models rely on key components from China. Production was supposed to ramp up in October 2025. Instead? It’s on hold.
According to Reuters, Tesla initially tried to eat the cost of the 34% tariff. But when the rate jumped, it became untenable. The company pulled the plug on importing those parts. That’s not just a delay—it’s a full-blown pause on the company’s next big launches.
Tariffs Hit Tesla on Both Sides of the Pacific
The pain didn’t stop there. China hit back, slapping a 125% tariff on U.S.-made cars. Tesla’s response? It halted orders for the Model S and Model X in China, one of its most important global markets.
This two-sided squeeze leaves Tesla with fewer growth levers. And investors are feeling it. The stock dropped sharply when the tariff news broke. Though a 90-day pause was announced for some countries, China wasn’t on the exemption list.
Analysts Weigh the Fallout and the Opportunity
Still, not everyone’s jumping ship. Christopher Tsai of Tsai Capital told Business Insider that he’s holding tight. He sees Tesla’s fundamentals as sound, despite geopolitical pressure.
Wedbush’s Daniel Ives went further. In a note cited by Teslarati, Ives said Tesla is “best positioned” among automakers to absorb the tariffs, thanks to its deep U.S. manufacturing base.
Others are trimming their price targets. Analysts are factoring in delivery risks and higher costs, especially if this trade spat drags on.
Tesla’s Weathered Worse but This Is a Strategy Test
Tesla’s been through rocky terrain before. From missed delivery targets to Elon’s courtroom distractions, the company’s been through the wringer and bounced back more times than most care to count. But this time? It’s not just about fixing a broken production line or smoothing out a supply hiccup.
This is a bigger test. It’s strategic. The latest tariffs force Tesla to reckon with its global footprint—especially the reliance on China, both as a market and as a critical manufacturing partner.
Right now, Tesla leans heavily on its Shanghai Gigafactory. It’s a linchpin for international deliveries, and it plays a major role in cost competitiveness. With Chinese-built EVs now facing up to 100% tariffs in the U.S., that math changes fast. Tesla will need to shift more load to its Fremont and Austin plants or fast-track newer initiatives like its Mexico Gigafactory project.
But even with domestic capacity, timelines are tight and margins are thinner at home. Labor costs are higher. Local sourcing isn’t always feasible. And then there’s the challenge of scaling without sacrificing efficiency—something Tesla has historically struggled with in new factories.
So the question now isn’t whether Tesla can survive the pressure. It’s whether it can quickly loosen its reliance on China, ramp up U.S. and Mexico production, and protect margins in a world where geopolitics now move the stock as much as deliveries do.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 16 Buys, 11 Holds, and 11 Sells assigned in the past three months. Furthermore, the average TSLA price target of $305.93 per share implies 20.4% upside potential.