U.S. President Donald Trump formally launched tariffs on imports from Canada, Mexico, and China over the weekend, a decision that is widely expected to have sweeping implications for Tesla, other automakers, and a broad range of other industries.
The Trump administration announced the news on Saturday, effectively establishing a 25-percent tariff on Canadian and Mexican imports as well as a 10-percent tariff on products from China. The tariffs will go into effect on Tuesday, and they have already caused ripple effects and a larger trade war with some of the companies.
Canada Prime Minister Justin Trudeau and Mexico President Claudia Sheinbaum spoke on the phone over the weekend, and while Sheinbaum hasn’t yet formalized or disclosed plans for counter-tariffs, Trudeau announced some on Saturday evening, according to Reuters. In the announcement, the Prime Minister said that Canada with also establish a 25-percent tariff on $155 billion worth of products from the U.S.
Trudeau has said that the government will release an updated list of products and tariff details, though the initial list included products such as certain appliances, beer, wine, lumber and other goods. He also says that the government plans to start with $30 billion on Tuesday, as followed by the additional $125 billion later this month.
The Trump administration says the tariffs are aimed at “addressing an emergency situation” related to the import of illegal drugs including fentanyl, along with pointing the blame at illegal immigrants.
“President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” the White House writes on its fact sheet dedicated to the order.
You can see the full fact sheet from the White House here, or check out the full executive order here.
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On Sunday, Trump also followed up with a post on his Truth Social account in response to criticism:
The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the “Stupid Country” any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example? THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.
Following a repost of Trump’s words on X, community notes pointed to a TD Economics saying that the U.S. has had a trade surplus with Canada for the last sixteen years straight when not including the energy sector, or oil, natural gas and electricity.
Multiple others have weighed in on how the tariffs could affect the industry at large, highlighting the potential for price increases for the consumer, potential layoffs, and some even saying that it will shut the auto industry down altogether.
In a report from Bloomberg on Sunday, Flavio Volpe, the President of the Canada Automotive Parts Manufacturers’ Association, said that he doesn’t think the country’s auto parts makers will be able to remain profitable with the tariffs in place.
“The auto sector is going to shut down within a week,” Volpe said. “At 25 percent, absolutely nobody in our business is profitable by a long shot.”
Others have warned of even more immediate effects, especially for Canadian and Mexican cities and states whose communities rely heavily on automotive manufacturing. One such city includes Windsor, Ontario, where John D’Agnolo, the union president of a local Ford factory there, says substantial numbers of layoffs could be imminent.
“We’re talking about thousands and thousands of jobs being lost,” D’Agnolo said. “We’d truly be a ghost town, here in Windsor, if we lost this type of business.”
Ontario Premier Doug Ford has also warned that it could affect as many as 500,000 jobs across the province, which is Canada’s most populated, with many of those being automotive roles.
Many also expect the increased costs to be passed onto the consumer, though it’s still unclear exactly what the repercussions of the tariffs could be. We could also see businesses absorb some or all of these costs, though some initial research seems to suggest that buyers will see higher sticker prices across the industry.
“It is going to be a lot of impact,” Aruna Anand, chief executive officer of parts supplier Continental AG’s North American business, said in an interview. “The question is who is absorbing the price and it becomes, are we able to absorb that price or is it going to be shifted to the end consumer?”
In a separate report from Reuters on Saturday, it was suggested that automakers such as General Motors (GM) and Toyota could, however, shift more production from overseas factories to those in the U.S., while major aluminum manufacturer Alcoa is considering re-routing plans that could potentially reduce tariffs. Many electric vehicle (EV) battery materials also come from metal mining operations in China, with some of these sectors just beginning to emerge domestically.
Others also report that the move could “undermine competitiveness” in the American auto industry, ultimately increasing the cost of building cars in the U.S.
“Our American automakers … should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce,” says Matt Blunt, the President of the American Automotive Policy Council, which represents Stellantis, GM and Ford.
During Tesla’s Q4 earnings call last week, Chief Financial Officer Vaibhav Taneja also warned that tariffs could affect profitability for the company, since its all of its production facilities utilize parts from around the globe.
“There’s a lot of uncertainty around tariffs,” Taneja said. “Over the years, we’ve tried to localize our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely, will have an impact on our business and profitability.”
It’s still not quite clear at this time how the tariffs may affect Tesla’s prices. While Tesla has regularly advertised having the “most American-made cars” with final assembly for the market taking place at its factories in Texas and California, the company also gets a significant amount of components from Canada.
In a filing with the National Highway Traffic Safety Administration (NHTSA) in October, Tesla did disclose what percentage of its vehicle parts are made in either Canada or the U.S., as compared to other countries such as Mexico and Japan. Some of the figures also don’t disclose where the remaining amounts come from, though they can give users an idea of how many components come from Mexico compared to either the U.S. or Canada.
You can see that data for Tesla’s vehicles below, though it’s also worth noting that it does not show the ratio of U.S. to Canadian parts—just a combined percentage from the two countries. You can also view the full filing from the NHTSA here.
- Cybertruck: 65 percent from U.S. and Canada; 25 percent from Mexico
- Model 3 Long Range: 75 percent from U.S. and Canada; 20 percent from Mexico
- Model 3 Performance: 70 percent from U.S. and Canada; 20 percent from Mexico
- Model Y (all trims): 70 percent from U.S. and Canada; 25 percent from Mexico
- Model S: 65 percent from U.S. and Canada; 20 percent from Mexico
- Model X: 60 percent from U.S. and Canada; 25 percent from Mexico
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.
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Tesla Cybercab production line is targeting hundreds of vehicles weekly: report
According to the report, Tesla has been adding staff and installing new equipment at its Austin factory as it prepares to begin Cybercab production.
Tesla is reportedly designing its Cybercab production line to manufacture hundreds of the autonomous vehicles each week once mass production begins. The effort is underway at Gigafactory Texas in Austin as the company prepares to start building the Robotaxi at scale.
The details were reported by The Wall Street Journal, citing people reportedly familiar with the matter.
According to the report, Tesla has been adding staff and installing new equipment at its Austin factory as it prepares to begin Cybercab production.
People reportedly familiar with Tesla’s plans stated that the company has been growing its staff and bringing in new equipment to start the mass production of the Cybercab this April.
The Cybercab is Tesla’s upcoming fully autonomous two-seat vehicle designed without a steering wheel or pedals. The vehicle is intended to operate primarily as part of Tesla’s planned Robotaxi ride-hailing network.
“There’s no fallback mechanism here. Like this car either drives itself or it does not drive,” Musk stated during Tesla’s previous earnings call.
Tesla has indicated that Cybercab production could begin as soon as April, though Elon Musk has noted that early production will likely be slow before ramping over time. Musk has stated that the Cybercab’s slow ramp is due in no small part to the fact that it is a completely new vehicle platform.
Tesla’s Cybercab is designed to work with the company’s Full Self-Driving (FSD) system and support its planned autonomous ride-hailing service. The company has suggested that the vehicle could cost under $30,000, making it one of Tesla’s most affordable models if produced at scale. Musk has confirmed in a previous X post that the vehicle will indeed be offered to regular consumers at a price below $30,000.
Musk has previously stated that Tesla could eventually produce millions of Cybercabs annually if demand and production capacity scale as planned.
Elon Musk
Tesla and xAI team up on massive new project
It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.
Elon Musk teased a massive new project, to be developed jointly by Tesla and xAI, called “Digital Optimus” or “Macrohard,” the first development under Tesla’s investment agreement with xAI.
Musk announced on X that Digital Optimus will “be capable of emulating the function of entire companies.”
Macrohard or Digital Optimus is a joint xAI-Tesla project, coming as part of Tesla’s investment agreement with xAI.
Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of…
— Elon Musk (@elonmusk) March 11, 2026
It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.
Essentially, it will be an AI version of a desk worker in many capacities, including accounting, HR tasks, and others.
Musk said:
“Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of real-time computer screen video and keyboard/mouse actions. Grok is like a much more advanced and sophisticated version of turn-by-turn navigation software. You can think of it as Digital Optimus AI being System 1 (instinctive part of the mind) and Grok being System 2. (thinking part of the mind).”
Its key applications would be used for enterprise automation, simulating entire companies, high-volume repetitive tasks, and potentially, future hybrid use with the Optimus robot, which would handle physical tasks, while Digital Optimus would handle the clerical work.
The creation of a digital AI suite like Digital Optimus would help companies save time and money, as well as become more efficient in their operations through massive scalability. However, there will undoubtedly be concerns from people who are skeptical of a fully-integrated AI workhorse like this one.
From an energy consumption perspective and just a general concern for the human workforce, these types of AI projects are polarizing in nature.
However, Digital Optimus would be a great digital counterpart to Tesla’s physical Optimus robot, as it would be a hyper-efficient addition to any company that is looking for more production for less cost.
Musk maintains that there is no other company on Earth that will be able to do this.
Elon Musk
Tesla China posts strong February wholesale growth at Gigafactory Shanghai
The update was shared by Tesla observers on social media platform X, citing monthly China Passenger Car Association (CPCA) data.
Tesla China sold 58,599 vehicles wholesale in February, reflecting strong year-over-year growth. The figure includes both domestic deliveries in China and vehicles exported to international markets.
The update was shared by Tesla observers on social media platform X, citing monthly China Passenger Car Association (CPCA) data.
Tesla’s February wholesale result represents a 91% increase year over year, compared with 30,688 vehicles in February 2025. Month over month, the result was down 15.2% from January, when Tesla China recorded 69,129 wholesale units.
The February total reflects combined sales of the Model 3 and Model Y produced at Gigafactory Shanghai. The facility produces the two vehicles for both domestic sales and exports.
Gigafactory Shanghai continues to serve as Tesla’s primary vehicle export hub, supplying vehicles to markets across Asia and Europe. Data compiled by Tesla watchers shows that 18,485 vehicles were sold domestically in China in January 2026, while exports accounted for 50,644 units during the same period.
Tesla has also been extending financing programs in China as it pushes to strengthen domestic demand. The company recently extended its seven-year ultra-low-interest and five-year interest-free financing programs through March 31, marking the second extension of the promotion this year.
The financing initiative was first introduced on January 6 as a strategy aimed at offsetting higher ownership costs ahead of China’s planned 5% NEV purchase tax in 2026. The promotion was originally scheduled to expire at the end of January before being extended to February and then again through the end of the first quarter.
Tesla’s efforts come amid growing competition in China’s EV market. According to data compiled by CNEV Post, Tesla’s 2025 retail sales in China reached 625,698 vehicles, representing a 4.78% year-over-year decline. Part of that decline was linked to the Model Y changeover to its updated variant in early 2025, which temporarily reduced deliveries during the transition period.
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