Automotive stocks in the domestic and international markets have declined after President Trump's decision to impose 25% tariffs on foreign automobiles and certain auto components. However, one automaker, Tesla, has seen its stock prices rise.

Tesla's stock soared by 5% during early trading while its competitors, GM and Ford, experienced declines of almost 7% and 3%, respectively.

One reason why Tesla may not be significantly affected by Trump's auto policies, including tariffs and electric vehicles (EVs), is due to the company's localized manufacturing. Although Tesla has gigafactories in China and Germany, the EVs produced there are not sold in the US. Tesla's vehicles sold in the US are manufactured exclusively at its Fremont, California, facility or at Giga Austin in Texas, distinguishing itself from other automakers that rely on a significant portion of overseas manufacturing.

Analyst TD Cowen's Itay Michaeli believes that Tesla could be a "relative winner" in the tariff conflicts, citing its 100% US production base as a key advantage. However, despite this advantage, some Tesla executives have expressed concerns in a letter to US trade representative Jamieson Greer, warning of potential retaliatory actions from US export partners and increased prices for internationally sourced parts.

Although Tesla is deemed a relative winner in this scenario, there are lingering worries about the potential impact of tariffs on the company, as mentioned by Musk. Additionally, uncertainties surround the future of the federal EV tax credit, which has played a crucial role in Tesla's existence and growth.