Tesla is poised to gain a major advantage over its competitors thanks to the latest move by the Trump administration.
Since April 2, former President Donald Trump has been promoting his so-called “Liberation Day” and outlining economic plans he claims will benefit the American people. But behind the slogans, the administration has introduced sweeping new tariffs that could significantly reshape the auto industry.
In late March, the Trump administration announced a 25% tariff on imported automobiles and certain auto parts—an aggressive effort to push car manufacturing back onto U.S. soil.
However, in a fact sheet released on April 29, the White House revealed a pathway for automakers to apply for exemptions from these tariffs. Notably, Tesla—Elon Musk’s electric vehicle company—is currently the only automaker that qualifies for this exemption.
The fact sheet outlines a strategy aimed at boosting domestic vehicle production, and Tesla’s existing U.S.-based manufacturing operations put it in a uniquely advantageous position under the new rules.
The new exemption will benefit 3 Tesla model vehicles (Kevin Dietsch/Getty Images)
A recently released fact sheet states: “President Donald J. Trump signed a proclamation to protect national security by incentivizing domestic automobile production and reducing American reliance on imports of foreign automobiles and their parts.”
The proclamation adjusts existing tariff policy on automobiles and their components, aiming to encourage manufacturers to build vehicles in the United States and reduce dependence on foreign imports.
Under the new policy, vehicles with 85 percent or more domestic content will be fully exempt from the new tariffs.
Currently, only one automaker meets this threshold: Tesla.
According to Fuel ARC, three Tesla models qualify— the Model Y, Model Y Long Range, and the Model 3 Performance—each exceeding the 85 percent domestic content requirement.
Ford trails closely behind with several Mustang GT variants, including the GT AT, GT 5.0L, and GT Coupe Premium, all containing 80 percent domestic content. Honda’s Passport AWD also ranks competitively with 76.5 percent domestic content.
Not all Tesla models qualify, however. The Cybertruck falls slightly short at 82.5 percent, while the Model S and Model X each contain 80 percent domestic content.
The announcement has sparked criticism on social media, with some accusing the policy of favoring Elon Musk and Tesla.
People on social media from apparent favoritism to Musk’s Tesla company (BRENDAN SMIALOWSKI/AFP via Getty Images)
Writing on a thread about the exemption, one Reddit user commented: “’Oh c’mon, there’s literally a multi-month difference between when Musk gave Trump $290 million and when the government started doing things that explicitly benefit him. There’s no way you can legitimately say that the two are related.’ – Most of my relatives, probably.”
Another said: “What an amazing coincidence! This is.”
With a third adding: “I’ll be in the market for a car soon, I’ll give you 1 guess which company won’t be on my list.”
With another user commenting: “I’m in San Francisco this week for the first time since early last November. Back then almost every 3rd car was a Tesla and now I barely see any.”
