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Amid US President Donald Trump's tariff threat, his 'first buddy' Elon Musk's Tesla has warned that it could make the company a target for retaliation against America and increase the cost of making vehicles in the country.
In an unsigned letter addressed to US trade representative Jamieson Greer, Tesla cautioned that US exporters were exposed to "disproportionate impacts when other countries respond to US trade actions" even as it asserted its support for fair trade.
"US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions," Tesla wrote in the letter dated March 11, news agency Reuters reported. "For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries."
The letter comes amid a trade war between Trump and others, including the US's European allies and Canada.
A person familiar with the development told The Financial Times that it's a "polite way" to point out the "bipolar tariff regime" disrupting Tesla. However, it is unsigned because no employee "wants to be fired" for sending it.
Tesla warned in the letter that increased costs could make American-made cars less competitive globally. The automaker also called for the reconsideration of tariffs on critical materials such as lithium and cobalt, which are already in short supply in the US.
Highlighting its efforts to localise its supply chain, Tesla pointed to its battery manufacturing plant in Reno, Nevada, and lithium processing facility in Corpus Christi, Texas. However, the company stressed that despite these efforts, certain components are still difficult or impossible to source domestically.
It urged Greer to further "evaluate domestic supply chain limitations to ensure that US manufacturers are not unduly burdened by trade actions that could result in cost-prohibitive tariffs on necessary components," The Financial Times reported.
"As a US manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices," Reuters quoted the letter as saying.
The letter was submitted as part of a broader request for comments from US businesses by the US Trade Representative (USTR), which is reviewing foreign trade practices and identifying any tariffs, taxes, or regulations that may be harming American companies. The automaker previously sent a similar letter during the first Trump administration, when widespread tariffs were introduced.
The March 11 letter was uploaded to the USTR website by Miriam Eqab, an associate general counsel at Tesla.
Musk has been a constant with Trump since the 78-year-old took office as US President. The world's richest man spent more than USD 250 million to support the Republican's re-election campaign.
Tesla shares have faced significant challenges in the market lately. The company's stock has fallen 40 per cent since the start of the year, with concerns about dipping sales and broader economic instability. Additionally, Tesla has encountered a consumer backlash in Europe, where some customers are dissatisfied with Musk's political support for right-wing parties. American showrooms have also become a focal point for protests, with critics taking aim at the Tesla CEO's role in government cuts.
Trump, however, has supported his close ally throughout. Hosting an event at the White House promoting the Tesla, the 78-year-old heaped praise on Musk by calling him a "truly great American" and also promised to buy one of its vehicles in a show of support.
Trump kept the promise by buying a red Model S sedan.
Published On:
Mar 14, 2025
