According to a report by the Wall Street Journal, Tesla is now requiring its suppliers to exclude components made in China in the manufacturing of its cars in the United States. People familiar with the situation told the news outlet that Tesla suppliers have already replaced some China-made components, with all other components set to be sourced outside China within the next year or two.
Ever since the global pandemic, Tesla has been looking to diversify its supply chain and reduce its dependance on a single region. The decision to pivot away from China-based suppliers was accelerated in light of new tariffs on Chinese imports, which made it difficult for Tesla to manage costs and develop a proper pricing strategy.
It isn’t just deepening geopolitical tensions between the US and China that affect Tesla, as other disruptions such as the standoff between the Netherlands government and Chinese-owned chipmaker Nexperia (a Tesla supplier), where the former assumed control and later relinquished it, have made it necessary for the electric vehicle (EV) maker to establish what is effectively two separate supply chains and decouple from China.
Tesla’s Giga Shanghai produces cars for China, Europe and most of Asia (including Malaysia) using parts that are sourced almost entirely from local Chinese suppliers. A November 2024 report from Shanghai Securities News states there are over 400 Tier-1 suppliers in China, with more than 60 of them heavily integrated in Tesla’s global supply chain.
Tesla sold US vehicles with Chinese-made lithium iron phosphate (LFP) batteries until last year, but those batteries are no longer qualified for specific EV tax credits and were subject to US tariffs under the Inflation Reduction Act (IRA), prompting the company to stop using them in US-made cars. The company is working on setting up a LFP battery plant in Nevada that is expected to be operational next year, although it may not have the volume to meet the company’s whole demand.
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malaysian tariffs were discounted from 24% down to 19% and then further down to 0% for selected items, so i guess even trump must have learnt from PH the art of giving discounts
Lucky our Tesla
imported from China
We are all looking for cheaper and better quality comfortable alternative. Let’s do it.
This clearly shows Chinese ev is leading both in tech and value for money
Proton and perodua supply chain, anyone up to the mark to step in fill the vacancy? If Malaysia serious about automotive industry this is opportunity