Tesla Inc. (Symbol: TSLA) closed 5.48% lower at $268.48 as market participants reacted to President Donald Trump’s sweeping 25% tariff on all imported cars and light trucks, set to begin 3 April 2025.
TSLA Slides as Trump’s Auto Tariffs Hit
Despite Trump’s assurance that the move would be “net neutral” for Tesla, the stock sold off sharply from an intraday high of $284.68 – reflecting that the real impact of the tariffs could be more complex. As Tesla relies on internationally sourced components, including lithium, cobalt, and semiconductors, the EV maker may not escape retaliatory measures.
With exports of Model 3s and Ys to markets expected to respond with reciprocal tariffs such as Germany, Japan and South Korea, the impact hits Tesla even harder.
At the same time, rising consumer prices may dampen EV demand in North America, just as Tesla prepares for Cybertruck ramp-up and continued factory expansion. The Center for Automotive Research warned that new car buyers could face thousands of dollars in additional costs, hurting demand. Trade groups like Autos Drive America echoed concerns that the tariffs will narrow consumer choice, inflate costs, and undermine manufacturing stability.
All of the above makes TSLA no exception to the widespread losses in global auto stocks, as the tariffs sparked immediate concern over higher costs, reduced vehicle demand, and retaliation from key U.S. allies.
Technical Analysis: Policy Shock Overshadows Recent Rally
TSLA stock price surged from around $223 on 20 March 2025 to a high of $286.64 by 26 March 2025, marking an impressive short-term rally. However, the chart now shows a shift in momentum, as the stock has pulled back to $268.48. Price has slipped below the short-term moving averages, with the 10-MA now acting as resistance.
Picture: TSLA retreats after peaking at $286.64 with a bearish MACD, while eyeing on support near $260 as seen on the VT Markets app.
The MACD has also confirmed a bearish crossover, with histogram bars deepening into negative territory – suggesting that selling pressure is building. While the overall uptrend remains intact from a broader view, short-term weakness could persist unless TSLA reclaims the zone between $275 to $280 soon.
Tesla Faces Choppy Terrain Ahead
This selloff reflects more than just a knee-jerk market reaction. The markets are now pricing in the risk of higher costs, political uncertainty and potential slowdowns in EV demand due to global trade instability. While the stock still holds above key medium-term levels, the momentum has clearly weakened.
If Trump follows through on reciprocal global tariffs on 2 April 2025, or if foreign governments target U.S. electric vehicles in retaliation, the outlook could darken further for TSLA.
Traders are now eyeing on the PCE inflation report and upcoming company delivery data for signs of whether the storm can pass.
