A potential delay in U.S. auto tariffs could be a welcome relief for Tesla (TSLA) and Detroit’s Big Three, General Motors (GM), Ford Motor (F), and Stellantis (STLA), according to Wedbush analyst Dan Ives.
For context, Trump announced the 25% automotive tariffs in late March. Tariffs on completed vehicles took effect on April 3, while tariffs on auto parts were scheduled to begin 30 days later. At that time, Ives slammed the U.S. tariffs on imported vehicles and auto parts, calling them a source of “pure chaos” for the auto industry. “A U.S. car made entirely with U.S. parts is a fictional tale,” he stated, warning that the tariffs could immediately drive up car prices by $5,000 to $10,000.
More Insights from Wedbush’s Ives on Auto Tariff Impact
Ives believes that the proposed 25% auto tariffs will likely target fully assembled vehicles rather than individual auto parts. This outcome would be significantly more favorable for U.S. automakers compared to earlier concerns about sweeping tariffs on parts, which could have disrupted domestic production.
That’s because avoiding tariffs on auto parts would benefit companies like Tesla and the big three which rely on parts imports but build many cars locally.
Additionally, Ives stated that disrupting a global auto supply chain that has taken decades to build isn’t something that can be done overnight. Wedbush firmly believes that the more practical and effective approach would be to impose tariffs on finished vehicles rather than on auto parts, which are still essential to U.S.-based car production.
Which Auto Stock Offers the Highest Upside, According to Analysts?
Using the TipRanks Stocks Comparison tool, we’ve compared major U.S. auto stocks to identify which one offers the highest upside, according to analysts.
Among the stocks compared, STLA stock offers the highest upside potential of 48.7% from current levels, based on an average analyst price target of $13.92. Meanwhile, STLA stock has a Hold rating from analysts.
