Tesla (NASDAQ:TSLA) led the electric vehicle sector higher on Wednesday after President Donald Trump dropped new tariff rates on imports from most U.S. trade partners to 10% for 90 days to set up more time for trade negotiations.

While Trump said imports from China will be hit with tariffs of 125% effective immediately, investors seem to be assuming that the U.S. and China will start to negotiate seriously. The risk of a trade war between the U.S. and China is a major consideration in the EV industry due to the reliance on China-made components and supply chain implications. 

Tesla (NASDAQ:TSLA) was up 21.7% at 3:50 p.m. to put shares back to where they stood on April 3. Trading volume on Tesla (TSLA) was over 173 million shares as the afternoon tariff announcement sent jolts across trading desks.

Other notable gainers in the EV sector included Polestar Automotive (PSNY) +18%, Lucid Group (LCID) +10.2%, Rivian Automotive (RIVN) +8.8%, VinFast Auto (VFS) +8.1%, Lotus Technology (LOT) +7.6%, Li Auto (LI) +7.1%, XPeng (XPEV) +6.5%, NIO (NIO) +5.8%, and ZEEKR Intelligent (ZK) +4.4%. Similar to Tesla (TSLA), most of those names were recouping loss from the last week and are still in negative territory for the year.

EV-related suppliers Stoneridge (SRI) +19.0%, REE Automotive (REE) +16.9%, QuantumScape (QS) +16.6%, and Hyliion Holdings (HYLN) +11.7% were also significant advancers off the tariff developments.