Import taxes could affect Tesla’s business, causing the electric car company’s stock to lose value and dragging down Elon Musk’s fortune.

Import tariffs could hurt Tesla’s business, causing the electric carmaker’s shares to fall, dragging down Elon Musk’s fortune.

According to the Bloomberg Billionaires Index, Tesla CEO Elon Musk is now worth $402 billion. Although he is still the richest person on the planet, his fortune has dropped by $47 billion since US President Donald Trump took office on January 20.

Previously, Musk was the biggest beneficiary of Trump’s re-election. In 2024, Musk’s fortune increased by nearly $250 billion, mainly due to Tesla’s soaring stock. Investors expect the US electric carmaker to benefit during Trump’s term, thanks to their close relationship. Musk spent $288 million on Trump’s election campaign, helping to bring him back to the White House.

However, the US President’s import tax policy has caused Musk’s fortune to decline. Since the session on January 21, this code has lost nearly 15%.

US billionaire Elon Musk in Beverly Hills, California, May 6. Photo: AFP

On February 1, Mr. Trump signed an executive order imposing a 25% tax on goods from Canada and Mexico and a 10% tax on goods from China. On February 3, he announced a delay in imposing tariffs on Mexico and Canada, after reaching an agreement to tighten smuggling and immigration with these two countries. Meanwhile, tariffs on China are still in effect from February 4, prompting Beijing to immediately take similar measures in retaliation, while also tightening exports of many important metals.

Investors are concerned that the tariffs will increase the production costs of Tesla cars and businesses that rely on imports of necessary raw materials, such as aluminum and lithium. These are important components in electric vehicle batteries.

China’s retaliatory tariffs against the US have also caused a lot of instability. China is currently a key market for Tesla. They are also operating a Gigafactory in Shanghai. The risk of slowing sales in China has weighed on Tesla shares.

SpaceX, Musk’s privately held company, has also been under pressure. Investors have said that new US import tariffs could impact the aerospace company’s supply chain. SpaceX currently buys many components needed for its Starlink satellite internet system from abroad. Therefore, import tariffs would indirectly affect SpaceX’s $350 billion valuation and Musk’s assets.

During the announcement of the fourth quarter financial report of 2024 on January 29, Tesla CFO Vaibhav Taneja also expressed concerns about import tariffs. “There is a lot of uncertainty. Over the years, we have tried to localize the supply chain in markets, but we still rely heavily on imported components from around the world. Therefore, the imposition of import tariffs will affect the company’s business and profits.”

Last quarter, Tesla’s profit margin from vehicle sales was just 13.59%, down from 17.05% in the previous quarter. This figure was also lower than analysts’ forecast of 16.2%.