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As the global auto world reeled from the potential fallout of Donald Trump‘s new auto tariffs, one name stood out as less affected than otherselectric-vehicle maker Tesla. The Texas-based company’s shares were the rare automotive stock to trade in the green in U.S. action, as analysts said Tesla’s supply chain and financial performance may not be affected by the wide-ranging levies that will affect global shipments of both cars and car parts to the United States, mainly due to the company’s largely domestic production. Still, that relief in the United States, where Elon Musk has become one of President Trump’s primary advisers, tasked with swiftly cutting federal spending, may not improve the brand’s reputation worldwide. Tesla shares have plunged more than 40% since peaking in mid-December as a protest movement against the EV company has erupted in the U.S. and around the world as the Musk-led Department of Government Efficiency has drawn heavy criticism for going after federal workers. The stock was up about 2% on Thursday. The 25% tariffs are expected to disrupt the global automotive industry, raise the cost of vehicles in the United States, and pinch automakers’ earnings. Shares of Ford, General Motors and Chrysler-parent Stellantis were down between 2.1% and 7%. While Tesla does import some parts from around the world, the company largely produces its vehicles in the United States. Analysts expect Tesla to report deliveries of about 398,000 vehicles when it reports figures for the first quarter next week, according to 20 analysts polled by Visible Alpha. Trump said the duties announced on Wednesday could be net neutral or even good for Tesla, adding that his close ally Musk did not advise him regarding auto tariffs. Several administration officials have defended Tesla in public comments in recent days, ranging from urging people to buy its stock to opening investigations into vandalism at Tesla dealerships. Still, Musk late on Wednesday said, “To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial.” Tesla imports lithium-ion batteries from China’s Contemporary Amperex Technology Ltd and other automotive parts from countries such as South Korea, Japan and Mexico, according to import filing data through the end of February provided to Reuters by ImportYeti. Car prices could rise by $5,000 to $15,000 if a 25% tariff on imported cars is maintained, according to Goldman Sachs. Automakers are likely to pass on the impact of tariffs to customers by raising prices, and that could close the price gap between Tesla’s electric vehicles and competing gas-powered cars, analysts said. “Tesla is a relative beneficiary given 100% U.S. production footprint, substantial U.S. sourcing and with Model Y competing in a midsize crossover segment where close to ~50% of vehicles could be subject to tariffs,” TD Cowen analysts said in a note. While Trump’s tariffs may benefit Tesla in the United States, the automaker faces mounting challenges in Europe and Canada, where political sentiment and reduced electric vehicle incentives are eroding its competitive position. In Britain and the European Union, Tesla is grappling with policy headwinds and shrinking subsidies that threaten to dampen demand and slow its growth trajectory. Canada has frozen a rebate program for Teslas. “Musk’s involvement with Trump might be a factor weighing on sales outlook outside of the United States,” Sandeep Rao, senior researcher at Leverage Shares, said. Akash Sriram, Arsheeya Bajwa and Richa Naidu, Reuters
Category:
E-Commerce
Trading platform Robinhood, best known for introducing a new generation of traders to the stock market, crypto, and ETFs, is growing up alongside its customers, moving one step closer to becoming a full financial service company the likes of Fidelity or Charles Schwab. On Wednesday, the digital brokerage announced plans to launch Robinhood Banking this fall, a one-stop service that provides traditional checking and savings accounts with luxury benefits, as well as Robinhood Strategies, a wealth management product. Customers will need a Gold subscription, which runs $5 a month or $50 a year, to open those individual and joint checking accounts, which will allow users “to send money across the world in over 100 currencies, and even get cash delivered directly to you” (more on that below). Robinhood’s new financial products will include new tools for wealth-management, AI-powered investment advice, access to tax advisors, estate planning, and instant transfers between Robinhood accounts and FDIC partner institutions for up to $2.5 million. Robinhood said the idea is to give members “access to financial services such as private wealth management and private banking, which were once thought out of reach to many.” But perhaps the most unique perk offered is that customers will be able to have cash delivered to their door same-day, likely as a way to continue to capture younger investors with their smartphones. (Robinhood’s median customer age is now 35, up from 31 five years ago.) Cash deliveries would work similarly to, say, DoorDash, serving up cash instead of food. Other unconventional perks for new banking customers reportedly include discounted helicopter rides. Our goal is for Robinhood to give you a world-class financial team in your pocket, with cutting-edge tools you cant find elsewhere, Vlad Tenev, Robinhood’s chairman said in a statement. Robinhood said in the statement that it would charge Gold members 0.25% annually on managed individual and retirement accounts up to $100,000, with a yearly cap of $250, “which means free management on every dollar over $100k and an effective management fee of 0.1% for portfolios with $250,000 or 0.05% for those with $500,000.” Unlike Robinhood Banking, Robinhood Strategies is already available to all Robinhood Gold members, and will begin rolling out to all customers in April, according to the company’s press release.
Category:
E-Commerce
Shares of GameStop fell more than 15% on Thursday after the company’s plan to finance its bitcoin pivot raised questions about the timing of its move and its strategy to turn around its struggling retail business. The video game retailer’s shares also gave up all their gains from a day earlier and were on track for their biggest one-day fall since last June, after the company said it was offering $1.3 billion in 0% 2030 convertible bonds to amass the cryptocurrency. The company’s announcement that it would buy bitcoin to hold as a treasury reserve asset had created a mini euphoria among retail traders, who keenly track the so-called “meme stock.” However, GameStop also announced the closing of a “significant number” of additional stores this year, signalling that its retail business continued to flounder despite attempts to turn it around. “Investors are not necessarily optimistic on the underlying business,” said Bret Kenwell, U.S. investment analyst at eToro. “There are question marks with GameStop’s model. If bitcoin is going to be the pivot, where does that leave everything else?” The timing of GameStop’s decision to buy bitcoin is also in focus as the cryptocurrency’s price has gained nearly 27% since November’s presidential election, though they are sharply down from record highs due to uncertain economic conditions. “Why did (GameStop) wait so long if they were going to go down this road? Six months ago, nine months ago would have made a lot more sense,” Kenwell said. The debt offering to fund bitcoin purchases mimics the playbook of Strategy, one of the largest individual holders of bitcoin that is widely seen as a bitcoin proxy. The overall outlook for crypto markets was also contributing to declines as GameStop’s move has “failed to meaningfully boost market confidence,” said Agne Linge, head of growth at decentralized bank WeFi. With the day’s losses, GameStop shares have dropped more than 23% this year. Lisa Pauline Mattackal, Reuters
Category:
E-Commerce
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