Ives: Tariffs are a “double whammy” for Tesla in the US and China

President Trump’s tariffs will hurt Tesla in America, since the electric vehicle maker sources components for its vehicles produced here from Canada and Mexico, according to a note Sunday from Wedbush analyst Dan Ives, who lowered his price target from $550 to $315. Even worse, tariffs will also hurt Tesla in one of its biggest markets: China, the “linchpin to the future success of Tesla,” which has recently announced its own retaliatory tariffs.

Per Ives:

“The backlash from Trump tariff policies in China and Musk’s association will be hard to understate and this will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng, and others. Tesla has essentially become a political symbol globally... and that is a very bad thing for the future of this disruptive tech stalwart and the brand crisis tornado that has now turned into an F5 tornado. We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self created brand issues and this could be a conservative estimate. In Europe, this number could be 20% or higher... all self-inflicted by Musk.”

Nonetheless, Ives reiterated his firm’s “outperform” rating, adding that “Musk has been with his back against the wall many times and every time Tesla came out of it and was stronger on the other side.”

Tesla stock is trading down more than 40% this year, below where Commerce Secretary Howard Lutnick said last month it would “never be this cheap again.”