From Morningstar: 2025-05-12 11:31:00

The US and China agreed on a temporary tariff cut for the next 90 days. The US will reduce tariffs on Chinese imports to 30% from 145%, while China will cut tariffs on US imports to 10% from 125%. Tesla’s stock rose 8% during premarket trading on May 12.

Tariffs can lead to inflation and reduced consumer purchases. Lower auto sales could affect Tesla’s primary business, impacting its total addressable market for other products and services, including autonomous driving software subscriptions, insurance, and charging.

Despite the tariff reduction benefiting Tesla from lower inflation, the company’s shares are currently trading nearly 30% above Morningstar’s fair value estimate. The forecast predicts lower deliveries in 2025, with a new affordable vehicle anticipated to generate significant deliveries by 2026.

Tesla plans to test its robotaxi service in Austin, Texas, starting in June. However, Morningstar does not believe Tesla’s autonomous vehicle software will be ready for a robotaxi service by the company’s 2026 timeline, possibly impacting the shares if there are any delays in the timeline.



Read more at Morningstar: Tesla Shares Surge on US-China Tariff Pause