Changing lanes Tesla urges overhaul of Trump tariffs hurting EV industry Tesla hopes to slow down Trump's tit-for-tat tariffs amid financial woes. Ashley Belanger Mar 14, 2025 2:20 pm | 3 Donald Trump and White House Senior Advisor, Tesla and SpaceX CEO Elon Musk deliver remarks next to a Tesla Model S on the South Lawn of the White House on March 11, 2025 in Washington, DC. Credit: Andrew Harnik / Staff | Getty Images News Donald Trump and White House Senior Advisor, Tesla and SpaceX CEO Elon Musk deliver remarks next to a Tesla Model S on the South Lawn of the White House on March 11, 2025 in Washington, DC. Credit: Andrew Harnik / Staff | Getty Images News Story textSizeSmallStandardLargeWidth *StandardWideLinksStandardOrange* Subscribers only Learn moreElon Musk's Tesla is waving a red flag, warning that Donald Trump's trade war risks dooming US electric vehicle makers, triggering job losses, and hurting the economy.In an unsigned letter to the US Trade Representative (USTR), Tesla cautioned that Trump's tariffs could increase costs of manufacturing EVs in the US and forecast that any retaliatory tariffs from other nations could spike costs of exports."Tesla supports a robust and thorough process" to "address unfair trade practices," but only those "which, in the process, do not inadvertently harm US companies," the letter said.The carmaker recommended that the USTRin its ongoing review of unfair trade practices and investigation into harms of non-reciprocal trade agreements"consider the downstream impacts of certain proposed actions taken to address unfair trade practices."According to Tesla, the current process to address unfair trade threatens to harm its more than 70,000 employees, and more broadly could trigger job losses and revenue dips in the US auto industry. It could also disrupt supply chains, as Tesla claims that even its best efforts prove it would be "impossible" to source all parts from the US currently."Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the United States," the letter said, asking the USTR to "evaluate domestic supply chain limitations."If left unchanged, the process could make the US less competitive in global auto markets, Tesla warned, recommending that the "USTR should investigate ways to avoid these pitfalls in future actions."Moving forward, Tesla recommends that the USTR "take into account" how the trade war could hurt US exporters, as "US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions."In the letter, Tesla appears to suggest that Trump's tariffs were rushed, suggesting that "US companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken."Tesla was not alone in submitting comments to the USTR. So far, hundreds of companies have chimed in, many hoping to push back on Trump's aggressive tariffs regime.Among them was a trade group representing major foreign automakers like BMW, Honda, and ToyotaAutos Drive Americawhich agreed with Tesla that the USTR should slow Trump down and require considerations about long-term impacts of sudden actions to address unfair trade. They similarly warned that imposing "broad-based tariffs will disrupt production at US assembly plants," Reuters reported."Automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shut-down US production lines, leading to potential job losses across the supply chain," the group said.Disrupting Trump trade war may be toughLast week, Trump's 25 percent tariffs on Canada and Mexico took effect, likely frustrating Tesla, which relies on a small parts manufacturer in Canada, Laval Tool, to source parts for the already costly molds for its Cybertrucks. Those tariffs threatened to spike costs beyond the current rate of nearly $500,000 per mold at a time when the Cybertruck hasn't been selling well, InsideEVs reported. And for Tesla, Trump's China tariffs may hit even harder, as China is Tesla's second biggest market.On the day that those tariffs kicked in, the head of the Alliance for Automotive Innovationwhich represents all the major US automakers, except TeslaJohn Bozzella warned that "all automakers will be impacted by these tariffs on Canada and Mexico," Reuters reported. He joined others predicting price hikes on cars coming soon, perhaps as high as 25 percent.Tesla's letter to the USTR is notably unsigned, despite CEO Musk's close allyship with Trump as a senior advisor in his administrationsuggesting Musk may be hesitant to directly criticize Trump's trade war or his opposition to EVs.Many have questioned how long Musk's friendship with Trump can possibly last, given their strong personalities and seeming unwillingness to bend to critics. At the beginning of this administration, Musk seemed unafraid to question Trump despite teaming up with him. Perhaps most notably, Trump's team was supposedly "furious" after Musk trashed Trump's $500 billion "Stargate" project with OpenAI, Politico reported, which Trump had hyped as "tremendous" and "monumental.""Its clear he has abused the proximity to the president," a Trump ally granted anonymity told Politico. "The problem is the president doesnt have any leverage over him and Elon gives zero fucks."Officially, Trump downplayed Musk's public criticism of his major announcement, seeming to understand that Musk views OpenAI CEO Sam Altmanwhom Musk is suing for making a "fool" out of himas an enemy."He hates one of the people in the deal," Trump told a reporter who asked if Musk's comments had bothered him, confirming, "it doesn't."Despite a long history of harsh comments about EVs, Trump has recently hyped Tesla cars, which Tesla noted in its letter to the USTR, further its mission "to accelerate the worlds transition to sustainable energy." The BBC noted Tesla's letter was sent the same day that Trump hosted a White House event where the president vowed to purchase a Tesla in defiance of Tesla boycotts and protests that some believe are driving a steep Tesla stock fall and even degrading the price of used Teslas. In a Truth Social post, Trump claimed that he was buying a Tesla to support "one of the Worlds great automakers" and "Elon's 'baby,'" alleging that protests and boycotts were somehow illegal.The Hill suggested that their friendship isnt likely to end soon, even though Trump has supposedly complained in private about taunts suggesting that Musk is really the president or somehow pulling the strings, The Independent reported.Musk may be settling into a good dynamic with Trump after spending ample time at the president's side, reportedly even joining meetings and sensitive calls. Or perhaps Musk is giving Trump space to call the shots, after Musk's Department of Government Efficiency's aggressive cuts at federal agencies sparked backlash that finally pushed Trump to rein in Musk's power a little.Musk's proximity to Trump was predicted to be a boon to his businesses, but Tesla has been stuck in a slump that seemingly some Trump allies think Trump might fear makes him look weak, The New Republic reported. But Trump has made tariffs the core of his trade policy, hoping aggressive taxes will force more industry into the US, and it's hard to see how Musk could easily influence him to shift gears.In Tesla's letter, the automaker told the USTR that it was "essential to support US manufacturing jobs" by ensuring that cost-prohibitive tariffs or other import restrictions don't disrupt critical auto industry supply chains. For Tesla, the stakes couldn't be higher, as the company reminded the USTR that "Tesla was ranked as the world leader in the transition to vehicle electrification," manufacturing "the best-selling car in the world (EV or otherwise).""Teslas US facilities support over 70,000 employees and are responsible for billions of dollars of US investment and economic activity each year," Tesla's letter said.Ashley BelangerSenior Policy ReporterAshley BelangerSenior Policy Reporter Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience. 3 Comments