Tesla warns Trump's tariffs could hurt business and raise costs

Elon Musk's electric car company Tesla has warned that President Donald Trump's trade war could make it vulnerable to retaliatory tariffs and drive up production costs for vehicles made in the US.

In a letter to US Trade Representative Jamieson Greer, Tesla expressed its support for fair trade but cautioned that American exporters were "exposed to disproportionate impacts when other countries respond to U.S. trade actions."

"For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries," the letter, dated March 11, stated.

Additional tariffs imposed by Trump's administration have already triggered countermeasures from Canada and the European Union, among others.

Tesla further said that, despite increasing domestic production, some raw materials and components would still need to be sourced from international markets.

"Trade actions should not (and need not) conflict with objectives to further increase and support domestic manufacturing," the letter said.

The Financial Times reported that the letter remained unsigned, with sources claiming that no one at the company wanted to risk being fired for sending it.

Tesla operates plants in China and Germany, in addition to its US facilities.

Tesla boss Musk has become a close ally of US President Trump during the presidential election campaign.

Trump appointed Musk to advise on reducing government spending and cutting jobs at federal agencies, a move that attracted criticism.

Meanwhile, Tesla's share price fell as analysts lowered their sales forecasts.

In a gesture of support, Trump attended a Tesla sales event at the White House this week, where he purchased one of the company's vehicles.