Tesla Stock Soars 6.4% on Tariff Concerns, Lawsuit

On April 23, 2025, Tesla's stock rose by 6.4% in pre-market trading, reflecting a positive sentiment among investors.

During Tesla's earnings call, CEO Elon Musk emphasized the company's advocacy for reducing tariffs, particularly highlighting the significant impact of high tariffs on Tesla's energy business. The company's reliance on Chinese-sourced lithium iron phosphate batteries has led to substantial financial pressure, prompting Tesla to accelerate the deployment of domestic battery production facilities in the United States. However, these local facilities currently supply only a fraction of the total battery capacity needed.

Musk acknowledged that while he advocates for lower tariffs, the final decision rests with the Trump administration. He stressed the economic benefits of lower tariffs and suggested that the administration should establish a predictable tariff structure to promote free trade and low tariffs. Additionally, Musk revealed that China's export restrictions on rare earth elements have affected the production of Tesla's humanoid robot, Optimus. To mitigate this, Tesla is seeking export licenses for rare earth elements from China.

Tesla is also facing a class-action lawsuit alleging that the company's mileage readings are significantly inaccurate. The lawsuit, filed by a law firm on behalf of California car owners, claims that Tesla's unique system for calculating mileage artificially inflates the actual distance driven, reducing warranty coverage and increasing profits. The primary plaintiff, Nyree Hinton, purchased a Tesla in December 2022 and experienced a drastic reduction in reported mileage after the initial six months, leading to premature loss of warranty coverage and substantial repair costs. The lawsuit, initially filed in Los Angeles Superior Court, has been transferred to the U.S. District Court for the Central District of California, seeking both actual and punitive damages. Tesla has not yet responded to requests for comment, but has previously denied the allegations.