Business
Trump’s Tariffs Could Help Tesla, by Hurting Its Rivals More
As President Trump puts new tariffs on goods from China and threatens a trade war with allies like Mexico and Canada, one global company is likely to suffer less than most of its competitors: Tesla.
But the electric car maker led by Elon Musk, which accounts for a third of the billionaire’s wealth, is also vulnerable if relations with China worsen. That country is the company’s second-largest market after the United States and it produces more cars there than anywhere else.
Tesla has built largely self-sufficient supply chains in the United States and China, a rarity in a world of interconnected trade. As a result, the tariffs imposed by the Trump administration on Chinese goods, and the continuing threat to put them on Mexican and Canadian products, might help Tesla by hurting its competitors more.
Although there is no evidence that Mr. Musk is shaping trade policies, the tariffs are one of several measures adopted by the Trump administration that may benefit Tesla at the expense of its rivals. On Wednesday, Mr. Trump paused 25 percent tariffs on most autos and parts made in Canada and Mexico, but the reprieve expires in a month, leaving automakers in the United States that depend on foreign supply chains in a state of uncertainty.
The administration is also trying to eliminate financial support for the construction of fast-charging stations for electric vehicles, a move that could handicap companies seeking to compete with Tesla’s extensive network. And it is attempting to cut or eliminate loans and subsidies that competitors like Ford Motor and Rivian are using to finance electric vehicle and battery factories.
Mr. Musk has said next to nothing about trade or the administration’s crusade to promote fossil fuels and impede sales of electric vehicles, which could also hurt Tesla. And his support of Mr. Trump has inspired protests at Tesla dealerships and weighed on Tesla’s share price. But his position as a de facto member of Mr. Trump’s cabinet gives him influence that far exceeds any other auto executive.
“Conflict of interest is putting it very mildly here,” said John Helveston, an assistant professor at George Washington University who teaches engineering management.
Tesla did not respond to a request for comment. A White House official said that its policies predated Mr. Musk’s support for Mr. Trump.
“President Trump consistently slammed Biden’s job-killing electric vehicle policies on the campaign trail since summer 2023 — more than a year before Elon Musk even endorsed President Trump — and he has consistently pressed companies to have their products be made in America since he first ran for president in 2015,” Kush Desai, a White House spokesman, said in an email.
The trade war and other Trump policies also hold risks for Tesla when the company is already in crisis, with sales plummeting in China and Europe even as the overall market for electric vehicles is surging.
Mr. Musk’s extensive investments in China leave him vulnerable as trade tensions between the Chinese government and the Trump administration rise.
“He could become a pawn in all of this,” said Lei Xing, an independent auto analyst based in Massachusetts who is focused on China.
Tesla is already struggling in Europe and China because of competition from Chinese electric carmakers and a dearth of new models. Anger over Mr. Musk’s political activities, including promotion of far-right parties, has also hurt demand in Germany, the United States and other markets. Mr. Musk’s personal wealth is tied up in Tesla stock, which has been on a steep decline.
When Tesla began mass-producing electric cars at a factory in Fremont, Calif., in 2012, it designed a supply chain that was less dependent on imports than virtually all of its competitors. Electric vehicles were a new technology then, forcing Tesla to largely develop its own sources of batteries, motors and other components.
Tesla built a battery factory in Nevada in partnership with Panasonic of Japan, and it remains one of just a few car companies to mass-produce batteries in the United States.
When, in 2014, Mr. Musk began talking about building a factory in China, he received a warm welcome from government officials. Tesla opened a factory in Shanghai six years later under unusually favorable conditions. Beijing changed ownership rules so that the company could set up without a local partner, a first for a foreign automaker in China. The Chinese government also ensured low-interest loans, access to top leaders and even changes that Tesla had sought on emissions regulations.
But Mr. Musk kept supply chains for the Chinese and U.S. factories relatively separate, unlike other auto companies that depend heavily on imported parts.
“He set himself up nicely in the event that trade goes sideways and tariffs go higher,” said Michael Dunne, a longtime China automotive consultant. “And that serves him well today.”
Today, the cars made in Shanghai are sold in Europe, Southeast Asia or in the domestic Chinese market — but not in the United States.
The cars Tesla sells in the United States are made at factories in Fremont and Austin, Texas. Tesla also produces charging equipment for its proprietary charging network — the nation’s largest — in Buffalo, N.Y. Tesla regularly tops an annual ranking by Cars.com, an online shopping site, of how much of a vehicle is American-made.
“Tesla is in a good position” to withstand tariffs, said Patrick Masterson, who oversees compilation of the data that goes into the Cars.com ranking. “Their domestic production is robust.”
Tesla is still vulnerable to tariffs on goods from China and Mexico because a quarterof the components and materials in the car, measured by value, is imported, according to data compiled by the National Highway Traffic Safety Administration. But electric vehicles made by Tesla’s competitors are much more vulnerable to tariffs.
General Motors’ Chevrolet Equinox sport utility vehicle, for example, is made in Mexico. With a starting price of $34,000, the battery-powered Equinox is a threat to the Tesla Model Y, which starts at $45,000 before government incentives. The Trump administration’s 25 percent tariff will erase most of that advantage, assuming it stands.
The risk to Tesla in China is harder to gauge. So far, Chinese leaders appear to see Mr. Musk’s role in the Trump administration as a plus, viewing him as a potential point of contact. In January, when Han Zheng, China’s vice president flew to Washington to attend Mr. Trump’s inauguration, he met with Mr. Musk.
“U.S.-China policy often has operated through specific personal relationships,” said Ilaria Mazzocco, a senior fellow in Chinese business and economics at the Center for Strategic and International Studies, a Washington think tank. “There is hope in China that he could play a constructive role.”
But Mr. Musk has also lost some bargaining power in China.
When Chinese leaders greenlighted the Shanghai factory, Tesla was seen as a technology leader that would spur development of the E.V. industry. With sales plummeting in Europe and weakening in China, however, Tesla production in Shanghai fell 50 percent in February from a year earlier. Chinese automakers like BYD and Xiaomi are introducing new models that rival Tesla in features like autonomous driving.
Tesla’s prestige and leverage in China may be diminished as a result.
“Tesla can no longer control China,” said Jia Xinguang, an independent automotive analyst in Australia. “But China, by contrast, can control Tesla.”
Still, China would likely think twice before targeting Tesla and Mr. Musk because doing so could make it more difficult to attract foreign investment, said Wang Yanhang, a fellow at the Chongyang Institute for Financial Studies at Renmin University in Beijing who tracks trade issues. “China will not shoot itself in the foot,” he said. “It is the last option.”
China has so far steered clear of autos when retaliating against the Trump administration’s tariffs on Chinese goods, instead raising duties on U.S. agricultural products like chicken and wheat.
Tesla has quietly fought at least one potential tariff on Chinese materials that would have a direct impact on its competitiveness.
China is the main source of high-purity graphite, an essential material for batteries. In December, a group of companies that are trying to produce battery-grade graphite in the United States accused China of dumping and asked the U.S. International Trade Commission to impose punitive duties that could be more than 800 percent.
At a hearing on the issue in January, Tesla hired a prominent Washington law firm to argue its case, and four Tesla executives spoke, according to public documents. Tesla is “pushing back because they don’t see an alternative to the Chinese graphite,” said Iola Hughes, head of research at Rho Motion, which tracks the battery industry.
Last month, the trade agency said there was a “reasonable indication” that Chinese exports of graphite were harming U.S. producers. The agency has not issued a final decision. Mr. Trump’s rhetoric on trade has not included any mention of graphite.
Joy Dong contributed reporting.
In a case that has become a local flashpoint, environmental groups seeking to halt a lithium operation in Imperial County until it gets further review argued before a state appeals court in San Diego on Thursday.
Controlled Thermal Resources wants to extract lithium from hot brine that will be used to power a geothermal electricity plant it plans to build. This type of lithium removal is different from traditional hardrock mining or evaporation ponds. The project also would need 6,500 acre-feet of fresh water annually for washing the mineral and cooling.
Earthworks, a nonprofit focused on the impacts of mining, and Comité Cívico del Valle, an Imperial County environmental justice group, allege the county didn’t adequately examine the project’s effects on water supply, air quality and tribal cultural resources when it granted approvals.
The groups filed suit in March 2024 and Imperial County Superior Court Judge Jeffrey Jones ruled against them in January 2025, saying the county met its legal requirements.
Before a panel of three judges for the California Court of Appeals 4th Appellate District, plaintiffs’ lawyer Doug Carstens argued that if water becomes scarcer, the project may rely on agricultural runoff that currently feeds the shrinking Salton Sea, exacerbating dust and air quality issues. He also said the environmental review did not account for future water-thirsty projects in the desert area.
“There will be a lot of straws dipping into the pool,” Carstens said.
The project, called Hell’s Kitchen, also failed to adequately involve local tribes in assessing the effect on cultural resources, he said.
Controlled Thermal Resources attorney Suzanne Varco said that the company reached out to 26 area tribes in 2021 and received no reply. She noted that one elder from Kwaaymii Laguna Band of Indians responded with concerns about mud pots and other resources in the area, but it was more than five months after the consultation period closed.
Justice Julia Kelety’s questions suggested the tribes provided names for resources in the area but failed to say how they would be affected.
Justice Truc Do said it was hard to assess fully how the project will affect the region’s water because the environmental review was unclear whether it will last 30 or 50 years. The region primarily relies on water from the overtapped and shrinking Colorado River.
The case is important because Imperial County has pegged its future to lithium, a mineral critical for electric car batteries. Two other companies are trying to reach commercial extraction near the Salton Sea. Gov. Gavin Newsom called Imperial Valley “the Saudi Arabia of lithium” in 2022, and has touted the industry’s potential to bring jobs and community benefits to one of the poorest counties in the state.
Multiple setbacks and deadline extensions later, lithium has yet to materialize even as industry job training programs graduate students into careers that have not arrived in the area. The county has blamed the lawsuit for the slow start. The boom and bust nature of mining as well as shifting federal policies have also played a role.
The court could decide within a few weeks to several months.
Earthworks and Comité Cívico del Valle have repeatedly said they don’t outright oppose lithium development in the area, but want CTR to acknowledge and minimize potential harm.
“We are not trying to stop the Hell’s Kitchen Project, we think it should be fixed, with enforceable protections for the environment, tribal cultural resources, and the health of frontline communities,” said Jared Naimark, senior manager at Earthworks.
Imperial County and CTR declined to comment on pending litigation, but Controlled Thermal Resources spokesperson Lauren Rose articulated a commitment to advancing geothermal and lithium development “as core components of our Hell’s Kitchen Project.” The company recently announced a plan to power local data centers which led some to worry about the company’s commitment to lithium.
Earlier this year the company delayed its plans for lithium production to 2028. Rose said the project is still progressing toward initial construction and will announce timing “as key development, financing, and construction milestones are achieved.”
Netflix on Thursday reported higher revenues and profit in the second quarter as it sought to assure investors about its growth prospects.
The streaming giant reported revenue of $12.6 billion in the second quarter, up 13% from a year ago. Net income during the period rose 9% to $3.4 billion.
Netflix said it expects revenue to grow 12% in the third quarter, but lowered its 2026 revenue forecast to $51 billion from $51.4 billion.
The results were roughly in line with what analysts had predicted and were driven by recent price increase and growth in advertising revenue. The latter is expected to reach $3 billion this year, the company said.
In a presentation with analysts, Netflix executives touted global expansion plans.
“We’re entertaining an audience approaching a billion people with still lots of room to grow into our addressable market on every measure,” said Spencer Neumann, Netflix’s chief financial officer, in the earnings presentation. “We believe we’ve got lots and lots of runway for solid growth ahead of us.”
Those comments appeared intended to assuage investors who’ve grown concerned that people could be spending less time on the streaming service as rivals like YouTube gain market share.
Netflix’s share of TV viewing time in the U.S. has steadily declined in recent months as rivals have gained market share, according to Nielsen data.
The streamer represented 7.8% of all TV viewing in the U.S. in April — the lowest percentage since May 2025. It was 7.5% in April 2025, Nielsen said.
By comparison, YouTube has seen its share of the streaming audience grow. YouTube’s TV viewing share in April rose to 13.4%, up from 12.4% a year earlier, Nielsen said.
Some investors fear that if viewership is down, subscribers could cancel the service, which would negatively affect the platform’s growing advertising business. It could also undercut Netflix’s ability to raise prices in the U.S. and other countries.
Those worries have caused Netflix’s stock price to plummet 41% in the last year. The stock closed on Thursday at $74.35 a share, up 1%. In after hours trading, the stock fell 8%.
“The engagement elephant continues to rear its head and investors are on edge that an earlier price hike in a seasonally tough period and lighter content slate could have driven more churn than usual,” wrote Morgan Stanley Research analysts in a research note.
On Thursday, Netflix said in a letter to shareholders it has a sophisticated understanding of its consumers and “we know not all hours are equal” and that engagement on its platform is “healthy.”
“The entertainment industry remains dynamic and competitive,” Netflix told shareholders. “We aim to stay ahead by executing against our three areas of focus: delivering more entertainment value, leveraging technology to improve every aspect of our service, and improving monetization.”
The Los Gatos-based company said it plans to allocate more than 5% of its content spend on live programming this year. Live content has been a key driver for subscriptions, accounting for six of the top 10 new member sign-up days over the last five years, the company said.
In the first half of 2026, Netflix said members watched more than 97 billion hours, up 2% from a year ago. Among the most popular shows: the crime thriller “I Will Find You,” which had 87 million views; and the romantic comedy film “Voicemails for Isabelle,” which garnered 71 million views.
Netflix has been adding new types of content to its platform, including video podcasts to help increase engagement with subscribers during the day.
As part of the diversification efforts, the platform has expanded its portfolio of live programming over the years, including adding NFL games and streaming Major League Baseball’s opening day game.
In 2022, Netflix had also faced investor pressure when it reported declining subscribers for the first time in more than a decade. That pushed the company to delve into other areas including advertising, gaming and cracking down on password sharing.
SpaceX stock dropped below its initial public offering price for the first time on Wednesday, signaling dwindling hype around the Elon Musk company.
Shares dipped below their IPO price of $135 on Wednesday morning for the first time since listing, a humbling loss for the stock, which had skyrocketed more than 50% in its first days of trading last month.
The shares regained some ground later in the day, closing at $135.27.
The initial offering gave the company a market cap of $2.2 trillion, making it one of the world’s most valuable public companies. For a short period, the IPO also made owner Elon Musk the world’s first trillionaire, though his net worth now is about $800 billion.
On July 7, the company was added to the Nasdaq-100 after a rule change allowed companies to join 15 days after their IPOs.
SpaceX raised a total of $86 billion after underwriters exercised their right to sell additional shares, on top of the $75 billion initially raised. It was the largest IPO in history.
SpaceX, based near Austin, Texas, is the leading launch services company in the world, with its Falcon 9 rocket accounting for the vast majority of satellites launched last year.
It is also the leading satellite-based broadband provider with its Starlink service. The extraordinary interest in the IPO was driven by Musk’s plans to make the company an AI leader — including plans to launch orbiting satellite data centers powered by the sun that crunch AI data.
The company’s headquarters moved from Hawthorne to Texas in 2024, but it retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
Since the IPO, SpaceX has used its newfound wealth to expand in the AI space.
It announced last month that it was acquiring the AI coding startup Cursor for $60 billion, with the deal expected to close in the third quarter. The San Francisco company, founded in 2022, enables engineers to instruct software in English to run coding tasks autonomously.
Musk also merged his xAI artificial intelligence company into SpaceX earlier this year. The combined entity recently announced it was leasing computing power to rivals Anthropic and Google at two terrestrial data centers it has constructed.
Since the IPO, investors have expressed concerns about the company’s spending plans and debt load.
Even with the volatility of the last month, there’s still more uncertainty to come.
The stock could fall further as locked-up shares held by current and former employees are released.
At least 20% of the shares will be released after second-quarter results are disclosed sometime in the coming months, with all the lockups expiring in December.
But Space X isn’t the only megacap stock to experience ups and downs early on.
Shares of Meta, then named Facebook, fell significantly below the IPO price of $38 before recovering. After its May 2012 launch, shares plummeted by nearly 50% and hit a record low of $19.69 in August 2012.
The company took more than 14 months to rebound, finally surpassing its $38 IPO price in July 2013.
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