Magnificent 7 lead market gains as tariff concerns ease
Tesla share price rallies despite weak sales in key markets
Tesla (TSLA) stock jumped nearly 12%, leading gains among the “Magnificent Seven” as investors reacted positively to reports that President Trump may delay new auto sector tariffs.
Key Takeaways
- Investor fears over new tariffs impacting Tesla’s bottom line eased after reports suggested the U.S. administration may delay or soften planned levies on imported vehicles.
- After weeks of stock declines, Tesla’s recent announcement of a 2025 robotaxi launch has helped restore investor confidence, providing a new growth narrative for the company.
- Despite the rebound, Tesla continues to navigate declining sales in key markets and political backlash against CEO Elon Musk, whose ties to Trump have sparked brand concerns.
Trump’s Tariff Plans May Not Target Automakers Immediately
Tesla’s rally was fueled by reports that President Trump may hold off on imposing new tariffs on the auto industry, a move that significantly eased investor concerns. Market participants had been bracing for potential levies that could increase production costs and disrupt supply chains, particularly for automakers like Tesla that rely on global sourcing for key components, reports Yahoo Finance.
The prospect of immediate relief from these tariffs reassured investors that Tesla’s profit margins and pricing strategy would remain intact in the short term. While details on the tariff decision remain uncertain, the delay suggests that any future trade restrictions may be less severe than initially feared.
Tesla’s Robotaxi Plans Boost Market Sentiment
Last week, Tesla’s stock had already begun recovering after the company confirmed plans to launch its highly anticipated robotaxi service in 2025. The autonomous ride-hailing initiative is seen as a key pillar of Tesla’s future growth, shifting focus away from its struggling vehicle sales.
Tesla Inc (TSLA) share price dynamics (Nov 2024 - Mar 2025) Source: TradingView
Adding to the positive momentum, Tesla addressed concerns about its Full Self-Driving (FSD) trial in China, stating that the feature will be rolled out once regulatory approval is obtained. The reassurance helped mitigate investor anxiety about potential roadblocks in Tesla’s expansion strategy.
Tesla Faces Regulatory and Political Challenges
Despite Monday’s surge, Tesla’s stock remains down approximately 31% year-to-date, reflecting broader concerns about declining sales and CEO Elon Musk’s political involvement. Tesla has reported weaker demand in major markets such as the U.S., China, and Europe, partially attributed to a slow transition to the new Model Y SUV.
Additionally, Musk’s outspoken political views and alignment with President Trump have reportedly alienated some customers, leading to concerns that Tesla’s brand perception is taking a hit.
The company’s leadership is working to reassure employees and investors, with Musk recently holding an all-hands meeting to reaffirm Tesla’s commitment to innovation and long-term success.
Tesla’s stock rally signals renewed investor confidence, driven by optimism over delayed auto tariffs and future robotaxi plans. However, ongoing challenges, including regulatory hurdles and political controversies, could continue to impact Tesla’s performance in the months ahead.
Additionally, Tesla saw its European sales fall sharply in February, lagging behind legacy automakers Volkswagen and BMW Group, as well as rising Chinese rivals.
