Only Teslas Exempt from New Auto Tariffs Thanks to 85% Domestic Content Rule

Summary

In a major policy shift, U.S. Commerce Secretary Howard Lutnick announced that vehicles with 85% or more domestic content will be fully exempt from new tariffs on automobiles. That’s a steep threshold, and as of today, there’s only one automaker that qualifies for the exemption: Tesla. Tesla Alone Qualifies for Full Tariff Exemption Here are the top 10 vehicles according to the most recent data on automobiles ranked by domestic content percentage: RankMakesModelTotal Domestic Content1TeslaModel 3 Performance87.5%2 (tied)TeslaModel Y Long Range85.0%2 (tied)TeslaModel Y85.0%3TeslaCybertruck82.5%4 (tied)FordMustang GT AT80.0%4 (tied)FordMustang GT 5.0L80.0%4 (tied)FordMustang GT Coupe Premium80.0%4 (tied)TeslaModel S80.0%4 (tied)TeslaModel X80.0%5HondaPassport AWD76.5% According to the 2024 data from the Kogod School of Business at American University, there are only three vehicles that meet the exemption threshold under the new tariff policy. Those are one cut of the Tesla Model 3 and two cuts of the Tesla Model Y with domestic content above the 85% mark. Where Automotive Tariffs Stand Today The base tariff rate for all imports is set at 10%, but the standard for many automakers and automotive part suppliers will be a stiff 25%, unless they qualify for a rebate program that will be available for the next two years only. Clearing that new 85% threshold is a massive win for any automaker, simplifying their supply chain, regulatory requirements, and most importantly, pricing. Is This Favoritism? You probably can’t tell, but I have an eyebrow raised over here, it’s been stuck that way since these exemptions were announced. While domestic content rules sound neutral on paper, the real-world effect of this policy is to carve out an exemption that only Tesla benefits from today. Watching Elon Musk hang out in the White House for weeks on end was initially puzzling. It certainly did nothing good for Tesla’s revenue numbers. It absolutely does make sense when you look at the n...