Trump's NEW 93.5% Tesla Battery Tariffs [Reality Explained]

There's now talk about a 93.5%

tariff on battery material from China.

So far though, the company that broke

this news from the commerce department

is Bloomberg. And they're only referring

to graphite, which is a really big deal

because there are other components that

could be a lot more expensive for

companies like Tesla. Worth noting some

details here. So about 2/3 to as much as

90% of graphite anodess, the basically

one of the parts or one of your

components of a battery, come from

China. So China's really got their grasp

on this, but they've also got a lot of a

grasp on nickel and cobalt. Now, in

terms of graphite, a an extended tariff

on graphite alone probably isn't that

big of a deal. We've really only got

about half upwards of maybe like 1/3 to

half of a kilogram of graphite or

Chinese graphite per battery pack for

let's say a Tesla for example, which

would really only add like4 to $6 per

pack. Not that big of a deal even if you

raise tariff costs a lot on graphite.

Where there's much more of a concern

would be on nickel or cobalt. Look, for

example, at just nickel. If you doubled

the taxes on nickel imports for battery

materials uh at current cost of about 28

uh dollars per kilogram using about $30

per each uh NCA and uh and MMC battery.

Well, now you're potentially adding $500

to $800

of cost per pack, which if you package

that on top of the already 55% imports

from China, import tariffs from China,

you're probably looking at taking about

a 1% hit to margin here, if this is on

all battery materials, especially that

nickel import. Now, here's what you got

to know about Tesla, for example. Right

now, they've got a whole different bunch

of battery chemistries. The old S's and

X's were in partnership uh with

Panasonic and or were made with partner

with a partnership with Panasonic. Uh

and they were the MCA batteries. These

are your nickel manganese cobalt

batteries also a form of a lithium

battery. Then uh you have the 2170 NMC

batteries. These are used in China in

the European Union. Also, nickel,

manganese, cobalt. Elon Musk doesn't

really like cobalt. These are usually

used in the Model 3s and Y's. So, in

America, we use more of the NCAs, which

also still have cobalt, but less

lithium, nickel, cobalt, aluminum

batteries. These are used in the Model

3s and Y's as well, the 2170s.

Partnership between Tesla, LG, and

Panasonic to deliver these. And then of

course you have the 4680 cells. These

are used in some Model Y but mostly

Cybert trucks. This is where Tesla has

this advantage of potentially

manufacturing all their batteries at

home at some point in the future. Just

know where we currently sit on 4680

production. We've so far produced about

100 mil puts Tesla somewhere at about

maybe a 200 million 4680 cell production

level per year. Uh, if you divide this

into how many cells each vehicle has,

like a Model Y having about 828 cells,

you're doing about 120,000 Model Y's, if

you're putting them into Model Y's, but

more obviously, uh, cells going into the

Cybert truck. Uh, so fewer vehicles.

This probably means somewhere around, if

you do 200 million 4680 cells locally,

you're really only covering somewhere

between 10 to maybe on the really good

side 20% of Tesla vehicles through

domestic production of batteries. And

most of them are going to be

incorporating Chinese uh uh materials

through their chemistries. This means

that yes, there is a tariff impact that

comes from tariffing all batteries from

China. Now, uh, right now we've already

got 55% tariffs on, uh, on on China in

general for all imports. We have a total

82% tariff on lithium battery packs from

China, but that's on the battery packs.

Now, since we're taking a lot of

material from China and assembling it in

the United States, it's possible the

Commerce Department is looking going,

"Ah, this is a loophole, and so we need

to tax some of the components higher." I

actually think some of this is because

of Donald Trump's issues with frankly

Elon Musk and it's kind of a directed

attack towards Elon Musk kind of trying

to hit Elon where it hurts because well

I mean let's be frank Elon's kind of

also trying to hit Trump where it hurts.

We know that Elon is a big proponent of

talking about the Epstein finals on

nearly a daily basis and it seems like

more and more we're getting responses

from Trump in not a loud way but a

relatively quiet way. For example, here

were just tweets 11 hours ago. Where's

phase two of the Epstein files? Here's a

thinking emoji about the DOJ reports

regarding FBI seizures from Epstein's

properties. videos and photos likely

insecure FBI vaults and likely heavily

redacted to protect victims, suggesting,

"Hey, if they're redacted, why not

release them?" Epstein recorded

everything. Uh, somebody replies to

which of course Elon puts a hundred. Uh,

and then what's your best guess as to

where videos of Epstein are located

right now? That's where we get the f uh

the FBI commentary. We also get Elon

Musk. I mean, you can see he's going on

and on and on about Epstein. We also get

him sort of mocking this idea that

Donald Trump calls it a hoax. And we

know that a lot of people on the right

want these Epstein files released. And

Elon Musk has made it a priority of the

America party to release the Epstein

files and find out what was actually in

them, which of course Elon has also gone

as far as alleging that Donald Trump is

in them and so is Steve Bannon. Uh he

also indicates, you know, this sort of

question exclamation mark surprise here.

There were 250 girls exploited again as

Maxwell uh you know helped recruit young

girls to give massages to Epstein and

then eventually get coaxed into sexual

acts for money. This pressure by Elon

Musk isn't being met with direct

blowback from Donald Trump talking about

Elon anymore. We don't hear a lot of

that. I think it's probably, hey,

commerce secretary, find out how to keep

the pressure up on them. Mind you,

you've already seen that electric

vehicle tax credits are going to be

expiring for those $7,500 or $4,500 on

used. Those expire September 30th at the

end of the year. You'll also see tax

credits expiring on solar purchases, but

not solar leases and power purchase

agreements. So, power purchase

agreements and leases, they'll keep

getting tax credits. And guess what?

Tesla doesn't do leases and power

purchase agreements. What's expiring?

direct purchase agreements of uh like

direct buys of of Tesla solar products

and those tax benefits are expiring. So,

you're seeing this consistent pressure

here by Donald Trump on Elon. Uh again,

right now, the Bloomberg article refers

to just graphite, which I basically

don't think has much of an effect at all

on Tesla. If you look at Tesla stock,

it's bouncing essentially off my 31862

line. Remember that in today's alpha

report, not only have we been pitching

open door since it was 60, but we

mentioned this morning in pre-market,

this is extended. It's time to set

trailing stops. And even though it was

up like 40% this morning, it's only up

12% now. So, we basically got the

momentum going in and we identified the

top so far in the alpha report. And if

you're not part of that yet, make sure

you go to meet Kevin.com to take

advantage of coupon code Mr. too late.

We do currently have the pay once and

stay in it offer which basically means

you pay once, you get lifetime access to

the courses, the trade alerts, all the

live streams, uh all the various

different programs, the tax programs

we're going to be talking about

regarding the now big beautiful bill as

well, Trumpomics. So, a lot of

interesting content. Uh there is various

reporting though on this 93.5% because

this is still preliminary. It's unclear

exactly what components are going to be

included. See, if you look over here,

this says the US has announced a

significant tariff increase on battery

materials imported from China, but it

doesn't mention graphite. Whereas the

Bloomberg piece does mention graphite,

which again is a smaller component. I

think worst case scenario, if you total

up all the tariffs, yes, you're looking

at a 1 to 2% margin hit. view for Tesla.

Uh, and and worst case, if we apply just

these nickel, you know, these tariffs to

nickel, graphite, and all the other

components all the way up to 93.5%. I

think you're at about a 1% tariff hit.

That's because we'd really be going from

55 to 93.5%. Right? So, there's that

difference, that delta of one when I say

1 to 2%. It's worth remembering that

batteries are historically very

profitable for Tesla. If you go to the

Tesla investor relations page, you'll

actually find that Tesla batteries in

their uh shareholder decks uh in their

energy division help them generate a lot

of margin. So obviously in addition to

the regulatory credits which are now

disappearing, but go to energy

generation for a moment and you can see

energy generation at $2.7 billion here.

And when we go to the cost of energy

generation or energy storage or whatever

here we're at 1945 in cost which means

our uh gross profit margins about 29%.

That's compared to the automotive sector

which is you know probably at this point

less than 16% especially without those

ZEV credits. So you've almost got double

the margin in the energy and battery

side for Tesla which is really

important. The problem is even that

energy and battery side is set to get

punished by you know these these wind

and solar uh hits. Uh in fact Bloomberg

intelligence via their uh ecological

research uh suggests that US tax credit

changes

may cut clean energy buildouts by 23%.

The big beautiful bill has slashed US

clean energy outlook by 23%.

Bloomberg NEF's new basease build

forecast versus the first half of 2025

clean energy market outlook and you

basically just get kind of like a drop

off uh in the buildout and on net

decreases the buildout of wind solar and

energy deployments between 2030 uh 25

and 2030 so over the next 5 years uh by

about 23%. That's sort of a bottom line

takeaway. Again, a lot of sort of

punishing for wronging probably or in in

Trump's mind, Donald Trump, you know,

Elon doing them. I think this is why a

lot of people want Elon out of politics.

Uh it's actually exactly why, you know,

the House hack board wants us to make uh

an announcement uh about uh politics and

uh and and removing the impact of

politics uh and and that sort of

exposure to like running for governor or

whatever because like first of all, we

think we've got really great things

coming for Houseack, not only house as a

company and our real estate, but also

the AI that we want to start licensing

in the fourth quarter. Stay tuned for

the announcement on that. You could

learn more about the company at

houseack.com and invest in our reggga if

you want to be part of uh that from a

venture capital point of view. You can

invest in the company even before we

make the announcement. But uh the point

is uh obviously read the risks and the

paperwork and everything uh involved

with making an investment. But the but

the point is you have a a broader clean

energy market that keeps getting

targeted by Donald Trump. And so while

we don't yet have all this clarity on

this commerce department dumping scheme

uh to you know whack China a little bit

more uh you do kind of see more and more

attacks on China with the exception of

in the chip sector probably because now

you've got some people over in the White

House suggesting that hey the Chinese

using Nvidia chips and using CUDA

actually helps America and it helps keep

China on American platforms rather than

keeping them uh in a position where they

want to develop their own. I think this

is why you ended up having this uh uh

this sort of idea of hey let's uh let's

license H20s again to China. So it's a

good thing. It's great for Nvidia and so

is that Lucid announcement this morning.

Fantastic for Nvidia. I think that's why

Nvidia is up another 1% today helping

the NASDAQ bounce. entertaining also

this morning in the alpha report. Uh I

said, "Hey, you need to bounce at 55720

today to and then I think you could go

bullish on the retail sales data

literally written out in our alpha

report and talked about in our course

member liveream and look at what

happened because I I released the alpha

report in pre-market and look at what

happened. We bounced within one penny of

my line and we were basically straight

up from there. So, like for example, if

you bought a day call just following

that bounce, it would have done

fantastically on the day. Just saying.

Something to look at. If you want to be

part of that, consider that alpha report

over at mekevin.com. Remember, you pay

once and you are in forever.

[Music]

So, uh, but anyway, broadly at the

moment, if this is just on graphite, not

a big deal on Tesla. Uh, but it does

signal that continued pressure on Tesla,

which is probably why you're back to the

318 line. uh that pressure from Trump

against Tesla, but it does obviously

affect all EVs uh and and frankly

battery manufacturing. It just

encourages more in the United States and

the and and Tesla does that. You know,

we want to see those 4680s expand.

Though in fairness, you have seen a

limited amount of talk from Elon Musk

about 4680s, which has led a lot of

people to suggest that maybe they're

just not as good as he hoped. Why not

advertise these things that you told us

here? I feel like nobody else knows

about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Pra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.