MW Tesla cars are U.S. made. So why is Tesla's stock is down so much?

By Claudia Assis

Tesla's stock gets caught on tariffs downdraft

Tesla Inc. EVs are made in the U.S. of mostly U.S. parts, but the company's stock got dragged down by generalized industry chaos and risk selloff amid President Trump's tariff plans just the same.

The talk of tariffs on Canadian and Mexican products hurled the U.S. auto and auto-parts industries in disarray on Monday, even as most market observers expect that the tariffs, if enacted, would be short-lived, and Mexico just got a reprieve.

Tesla's stock $(TSLA)$ fell more than 6%, poised to close at its lowest in one month and suffering the biggest one-day percentage drop since Dec. 18, when the stock fell 8.3%. The stock is down nearly 21% from its record closing high of $479.86 on Dec. 17.

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Tesla would mostly be exposed to counter-tariffs, analysts at Evercore ISI said in a note Monday. They calculated a potential hit of about 4% to 7% on the company's earnings before interest and taxes on its sales in Canada and Mexico.

Detroit carmakers General Motors Co. $(GM)$, Ford Motor Co. $(F)$, and Stellantis NV (STLA)are heavily tied to production in Canada and Mexico, Wedbush analyst Dan Ives said in his note.

"Tesla is clearly the least exposed of the auto players to these overall tariffs as its supply chain in the U.S. is much more insulated than other auto makers," he said.

A National Highway Traffic Safety Administration database displaying parts contents for hundreds of cars available for purchase in the U.S. showed Tesla cars as among the top U.S.-made vehicles in the country.

Tesla's Model 3 compact sedan is 75% made with parts from the U.S. and Canada, while bestselling Model Y, Tesla's compact SUV, clocks in at 70%. The cars have 20% to 25% of their parts made in Mexico, where Tesla is planning a future assembly plant.

The Cybertruck, Tesla's electric pickup truck, has 65% U.S.-made parts and 25% Mexico-made parts.

No. 1 on the list is Kia Motors' EV6, an electric crossover, with 80% of its parts from the U.S. or Canada.

The NHTSA list doesn't distinguish between U.S.-made and Canada-made parts that make the vehicles on its list, which speaks to the interconnectedness of the industry.

Trump said later on Monday that the anticipated tariffs on Mexico would be paused for a month to allow the two governments to negotiate.

The U.S. president also said he and Canadian Prime Minister Justin Trudeau spoke Monday morning and planned to speak again at 3 p.m. Eastern time.

-Claudia Assis

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February 03, 2025 13:50 ET (18:50 GMT)

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