In an interesting development, EV maker Tesla (TSLA) has sent a letter to the Trump administration about the potential consequences of its trade policies. In the letter to Trade Representative Jamieson Greer, Tesla explained that it could become a target for retaliatory tariffs. Although Tesla supports fair trade, it warned that U.S. exporters are more vulnerable when other countries respond with their own tariffs.
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In addition, the firm noted that tariffs could increase costs for manufacturers and reduce the competitiveness of American-made vehicles overseas. Tesla also asked the administration to avoid imposing tariffs on essential minerals like lithium and cobalt because they are hard to find in the U.S. Indeed, despite its best efforts to build a domestic supply chain, Tesla said that some components are impossible to source within the U.S.
Unsurprisingly, Tesla’s warning comes at a challenging time for the company. Its stock price has dropped 40% since the start of the year due to worries about its declining sales and uncertainty around economic and trade policies. Additionally, Tesla has faced backlash in Europe over CEO Elon Musk’s support for right-wing political parties, as well as protests in the U.S. over Musk’s involvement in government spending cuts.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 12 Buys, 13 Holds, and 12 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $331.07 per share implies 37.6% upside potential.