This is How Tariffs Could Hurt US EV Stocks

Donald Trump’s car tariffs are causing panic among international brands, but domestic automakers won’t be safe either.

Apr 08, 2025

Planned tariffs on automotive parts are set to impact even US-based EV manufacturers.
The share prices of Tesla, Rivian and Lucid have all slid in the year to date amid a broader market selloff.
Rivian and Lucid could capture market share from Tesla as consumer sentiment towards the EV giant continues to sour.
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US President Donald Trump rocked the automotive industry in March when he imposed a flat 25% tariff on any vehicles not assembled in the US.

In a fact sheet explaining the reasons behind the tariffs, the Trump administration argued that the US automotive industry “is vital to national security and has been undermined by excessive imports threatening America’s domestic industrial base and supply chains”.[1]

This piece will look at how three US electric vehicle (EV) makers — Tesla [TSLA], Rivian [RIVN] and Lucid [LCID] — might be affected by the tariffs.

Trump Targets Auto Parts

Trump’s tariffs, which came into effect on April 3, are designed to boost domestic automotive production.

According to S&P Global Mobility, 46% of the approximately 16 million vehicles sold in the US in 2024 were not assembled on American shores.[2]

Data from the US Department of Transportation’s National Highway Traffic Safety Administration shows that Tesla, Rivian and Lucid models have their final assembly points in the US.[3] In theory, therefore, they should not be impacted by Trump’s tariffs.

The problem is that Trump is also slapping 25% tariffs on certain auto parts, to come into effect no later than May 3.

Even if a vehicle is assembled in the US, it can never be truly classed as being US-made, given the complexity of global supply chains. As the graph below shows, approximately 70% of US-assembled cars have US-made components, but they account for less than one-fifth of all parts in cars assembled and sold in the US.

Wedbush analyst Dan Ives wrote in a note to investors following Trump’s announcement that “a US carmaker with parts all from the US is a fictional tale that does not exist and [it] would take years to make this concept a reality”.

Ives estimates it could take three years to reshore just one-tenth of the automotive supply chain, not to mention billions of dollars of investment.[4]

EV Stocks Are In Reverse

Even though they assemble EVs in the US, Tesla, Rivian and Lucid have seen their share prices skid amid the broader market selloff.

The Tesla share price has reversed 9.98% in the week through April 7 and 42.23% since January 1.

The Rivian share price has fallen 9.96% and 15.71% in the respective periods.

The Lucid share price has posted marginal growth of 1.24% and a reversal of 18.87%.

For comparison, the iShares Self-Driving EV and Tech ETF [IDRV] is down 11.63% year-to-date.

TSLA vs RIVN vs LCID Past 12 Months Performance

Tesla and Rivian See Q1 Sales Decline

The question for EV makers is what impact Trump’s automotive tariffs could have on demand. Assuming they result in higher production costs, then they could lead to higher prices and consumers could pull back on making big purchases.

Tesla’s sales are already coming under pressure from Elon Musk’s involvement in politics. Deliveries slumped 13% year-over-year to 336,681 in Q1.[5]

Rivian reported deliveries declining by 36% from Q1 2024 from 13,588 units to 8,640 units.[6]

Lucid was the outlier of the three, reporting a 58% jump in deliveries to 3,109 units from 1,967 units in the year-ago quarter.[7]

Here’s a comparison of the three stocks’ fundamentals.

Neither Rivian or Lucid is profitable yet. However, even after the huge selloff since the start of the year, Tesla could be considered overvalued given its high P/E ratio and falling sales.

TSLA, RIVN and LCID: The Investment Case

The Bull Case for Tesla

There was some relief for Tesla shareholders in early April when reports emerged that CEO Elon Musk will leave his White House role in the next couple of months.

Wedbush’s Ives said in a note that “investors should see [his] slow but steady departure … as a very positive sign for Tesla”.[8]

The Bear Case for Tesla

The issue for Tesla is whether Musk has leaned too far to the right and whether he can win over consumers who have lost confidence in him.

Musk’s bold target of 20–30% growth in vehicle deliveries this calendar year currently looks a long way from being achievable.[9]

The Bull Case for Rivian

Speaking at the Wolf Research Virtual Autos Summit a week before the 25% tariffs were announced, Rivian CEO RJ Scaringe said that the company had a number of “contingency plans that allow us to adjust”.[10]

He also said that sourcing contracts for parts for its upcoming R2 SUV, due to launch in the first half of 2026, had been signed over the past six months or so. “We’ve built contracts that had some protections for us in the event of tariffs going up,” he added.

The Bear Case for Rivian

The uncertainty over tariffs led Rivan to issue weaker-than-expected guidance when it reported Q4 2024 earnings in February. It expects to deliver 46,000–51,000 vehicles in 2025, down from 51,579 in 2024.[11]

Scaringe told CNBC following the earnings report that the lower forecast reflects the impact tariffs could have on consumer demand.[12]

The Bull Case for Lucid

Musk’s political antics have resulted in Lucid seeing a “dramatic uptick” in demand from former Tesla owners over the past couple of months, interim CEO Marc Winterhoff told Fox Business a few days after Trump’s tariff announcement.

People have a “negative feeling about Elon” and are “looking for an option to not continue having a Tesla,” Winterhoff said.[13]

The Bear Case for Lucid

The company was hit with the sudden departure of its former CEO Peter Rawlinson in February. Rawlison, who had been the chief engineer on Tesla’s Model S sedan, was a key player in developing Lucid’s powertrain technology.[14]

BofA downgraded LCID stock from ‘neutral’ to ‘underperform’ following the news, arguing that the market probably does not fully understand the consequences of Rawlison’s exit.[15]

Conclusion

Tesla, Rivian and Lucid are all sheltered from Trump’s tariff in some regard, because they assemble their vehicles sold in the US on American soil. However, none of their EVs are free from imported parts. The three stocks — and the broader EV theme — are likely to face a bumpy road ahead.

This is for informational purposes only. OPTO Markets does not recommend any specific securities or investment strategies. Investing involves risk and investments may lose value, including the loss of principal. Past performance does not guarantee future results.

[1] https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-adjusts-imports-of-automobiles-and-automobile-parts-into-the-united-states/

[2] https://www.spglobal.com/automotive-insights/en/rapid-impact-analysis/us-import-tariffs-will-reset-automotive-value-chain

[3]

[4] https://www.morningstar.com/news/marketwatch/20250403265/new-car-prices-could-climb-15000-under-trumps-tariffs-and-no-one-wins-wall-street-analyst-says

[5] https://ir.tesla.com/press-release/tesla-first-quarter-2025-production-deliveries-and-deployments

[6] https://rivian.com/en-GB/newsroom/article/rivian-releases-q1-2025-production-and-delivery-figures

[7] https://ir.lucidmotors.com/news-releases/news-release-details/lucid-announces-q1-production-deliveries-sets-date-first-1

[8] https://finnhub.io/api/news?id=6d34b22ed9ccd963a93b481dc6130acfb994e60d3f39f68eefaec4a6b9303198

[9] https://www.fool.com/earnings/call-transcripts/2024/10/23/tesla-tsla-q3-2024-earnings-call-transcript/

[10] https://uk.marketscreener.com/quote/stock/RIVIAN-AUTOMOTIVE-INC-129226108/news/Transcript-Rivian-Automotive-Inc-Presents-at-Wolfe-Research-Virtual-Autos-Summit-Mar-18-2025-12-49366030/

[11] https://downloads.ctfassets.net/2md5qhoeajym/4bRHWWpn57tfMt9KEdEuhT/f9e991ab2f9a3fbe7dcfa33b63ae4917/EX_-_99.2_4Q24_Shareholder_Letter.pdf

[12] https://www.cnbc.com/2025/02/20/rivian-rivn-earnings-q4-2024.html