Finance
Tesla tariffs on Chinese parts to cost about $50 million in Q4
-
Tesla said
on Wednesday in its third-quarter earnings letter that it
expects tariffs on parts made in China to cost around $50
million during the fourth quarter of this year. -
The automaker said it expects gross margins on its
Model S sedan and Model X SUV to fall slightly due to increased
tariffs on Chinese parts. -
Gross margins for the Model 3 sedan should remain
stable, Tesla
said, due to manufacturing cost efficiencies and fixed cost
absorption.
Tesla said on Wednesday in its third-quarter earnings letter that
it expects tariffs on parts made in China to cost around $50
million during the fourth quarter of this year.
The automaker said it expects gross margins on its Model S sedan
and Model X SUV to fall slightly due to increased tariffs on
Chinese parts, which it said will not be completely offset by
cost efficiencies in its manufacturing process. Gross margins for
the Model 3 sedan should remain stable, Tesla said, due to
manufacturing cost efficiencies and fixed cost absorption.
Model 3 gross margin exceeded 20% during the third quarter, while
the total gross margin for all of its vehicles neared 26%.
Tesla
posted
adjusted
earnings of $2.90 per share (compared to an analyst forecast of
-$0.15 per share) on $6.8 billion in revenue (compared to an
analyst forecast of $6.315 billion) during the third
quarter.
Other automakers, like BMW, Ford, and Honda, have said
tariffs on steel and aluminum imposed by President Donald Trump’s
administration have had a negative impact on their financial
performance. The Trump Administration announced tariffs on
foreign-made steel and aluminum in March, part of a series of
proposed and enacted tariffs that have resulted in retaliatory
measures from China and increased tensions between the US and
China.
Have a Tesla news tip? Contact this reporter
at [email protected].
Get the latest Tesla stock price here.
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