Even though he may be one of President Donald Trump’s biggest allies, Elon Musk has spoken out against increased tariffs.
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“I’ve been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity,” Musk said on the most recent Tesla earnings call. “I’ll continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.”
Musk’s feelings about tariffs are likely motivated by the fact that they are projected to hurt Tesla’s bottom line. Even though Tesla is a U.S.-based brand, the cost to manufacture the cars is likely to increase due to tariffs because many of its component parts and materials are manufactured abroad.
“It’s kind of invisible to the American consumer because you don’t see all of the different parts and components that go into American-made products,” said Dan Schwarz, CEO of FutureSearch, “but those companies bear that cost, and they will pass some of that cost onto the consumer.”
New research from FutureSearch examined the component parts of the Tesla Model 3, the cost of those parts and their country of origin to determine how much more expensive this model could cost due to tariffs. Here’s what the research determined.
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Tesla Model 3s Are Likely To See a Significant Price Increase
The starting price for a Tesla Model 3 is currently $34,990. FutureSearch’s research predicts that tariffs could add a whopping $15,000 to the cost. That’s because many of its component parts are manufactured abroad, with parts currently imported from China, Japan, South Korea, Taiwan, Australia, Indonesia, Germany and the Democratic Republic of Congo.
The research predicts that tariffs could add an additional $268 to the cost of a monthly lease.
“The increase in price to American-made cars is comparable to the increase in price of foreign made cars,” Schwarz said.
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Prospective Buyers Should Act Now
Although the actual impact of tariffs remains to be seen, Schwarz recommended that prospective car buyers make moves sooner rather than later.
“Our best forecast is that the place where tariffs stabilize will be sufficiently high, and that it will be cheaper to buy those cars now,” he said. “It seems unlikely that in this regime, the tariffs will go down. They’re probably just going to go up, and it’s a question of how much they’re going to go up, but our expectation is they will go up more than people are expecting, and price increases will be higher than you currently see.”
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Sources
Dan Schwarz, FutureSearch
FutureSearch, “Tariffs and the Prices of American-made Goods” (April 18, 2025)
This article originally appeared on GOBankingRates.com: Here’s How Much More a Tesla Model 3 Could Cost Due to Tariffs
