China Retaliation: A Major Headwind
China remains one of Tesla’s biggest markets, and any counter-tariffs or trade restrictions could severely impact sales. If China imposes higher duties on U.S.-made EVs or restricts Tesla’s operations, the company could lose a significant revenue stream, hurting margins and stock performance.
Rising Costs, Shrinking Margins
Tariffs on Chinese components could drive up Tesla’s production costs, reducing profitability. While legacy automakers like Ford and GM may benefit from protectionism, Tesla’s reliance on global supply chains could backfire, forcing price hikes that hurt demand.
Weakening EV Demand
The EV market is already showing signs of slowdown, with demand cooling in both the U.S. and China. Higher prices due to tariffs could further weaken consumer interest, making Tesla’s ambitious growth targets harder to achieve. Meanwhile, competitors like BYD continue to expand aggressively, offering more affordable alternatives.
Technical Resistance at $300?
Tesla’s stock has struggled to hold gains, failing to break above key resistance levels. If macroeconomic pressures and trade tensions escalate, TSLA could face another leg down, testing support levels below $250.
Bearish Outlook: More Downside Ahead?
While the market initially reacted positively to the tariff news, the long-term effects could be damaging. If China retaliates and costs rise, Tesla’s profitability could take a hit, leading to increased volatility. Without strong fundamental support, TSLA may struggle to hold above $300—making this a potential bull trap rather than a sustained breakout.
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