U.S. President Donald Trump talks to the media, next to Tesla CEO Elon Musk with his son X Æ A-12, at the White House in Washington, D.C., U.S., March 11, 2025.
Kevin Lamarque | Reuters
Elon Musk said on Tuesday that he doesn’t like high or unpredictable tariffs, but any decision on what happens with them “is entirely up to the president of the United States.”
Speaking on his company’s first-quarter earnings call, with tariff-related uncertainty swirling across the economy, Musk said Tesla is in a relatively good position, compared to other U.S. automakers, because it has “localized supply chains” in North America, Europe and China.
Musk said Tesla is the “least-affected car company with respect to tariffs at least in most respects.”
Tesla reported troubling quarterly earnings and sales on Tuesday, including a 20% year-over-year drop in automotive revenue and a 71% plunge in net income. The company also said that it wasn’t providing any guidance for 2025 at least until its second-quarter update.
While Musk is one of President Donald Trump’s closest advisers, tariffs are the one issue where he’s partially broken with the administration. He recently called Peter Navarro, Trump’s top trade adviser, a “moron” and “dumber than a sack of bricks.”
On Tuesday’s call, however, Musk said, “If some country is doing something predatory with tariffs,” or “if a government is providing extreme financial support for a particular industry, then you have to do something to counteract that.”
Tesla’s stock price has been hammered since the president floated his plan for widespread tariffs earlier this month, and that was after the shares plunged 36% in the first quarter, their worst performance for any period since 2022.
Because Tesla manufactures cars that it sells in the U.S. domestically, the company isn’t subject to Trump’s 25% tariff on imported cars. But Tesla counts on materials and supplies from China, Mexico, Canada and elsewhere for manufacturing equipment, automotive glass, printed circuit boards, battery cells and other products.
Musk said he offers his advice to the president on tariffs.
“He will listen to my advice. But then it’s up to him, of course, to make his decision,” Musk said. “I’ve been on the record many times saying that I believe lower tariffs are generally a good idea.”
He added that he’s an advocate for “predictable tariff structures,” as well as “free trade and lower tariffs.”
Musk said Tesla’s energy business faces an “outsized” impact from tariffs because it sources lithium iron phosphate battery cells, used in his company’s cars, from China.
“We’re in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S.,” he said. But he said the company can “only serve a fraction of our total installed capacity” with its local equipment.
“We’ve also been working on securing additional supply chain from non-china based suppliers, but it will take time,” he said.
Musk called Tesla the most “vertically integrated car company” but said that there are still plenty of parts and materials that come from other countries. Even though it’s built a lithium refinery in Texas, “we’re not growing rubber trees and mining iron yet,” he said.
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