Elon Musk Says No To Tariffs Against Chinese EVs Set By The US

Initially vocal in supporting tariffs against Chinese-made EVs and EV parts, Tesla head Elon Musk has reversed course on the matter.

Recently the American government has decided to impose 100% tariffs against electric vehicles (EVs) and EV components sourced from China.  Initially, Tesla chief executive Elon Musk, who was vocal in supporting this decision. However, Musk has suddenly changed the tide in his decision. 

Recently, Musk expressed his opposition to new tariffs imposed on Chinese-made EVs and EV components. Musk stated that he did not ask for the tariffs and that Tesla competes well in China without them. “Neither Tesla nor I asked for these tariffs, in fact I was surprised when they were announced,” he said. 

Besides Musk, other industry giants also shared the same opinion on the matter. Carlos Tavares, CEO of Stellantis, called the tariffs a "major trap", claiming that they will deter Western automakers from reorganising to adapt to the challenges posed by their Chinese rivals.

However, it seems like Tesla had been preparing earlier before the tariffs on Chinese EV vehicles were implemented. According to a report from Nikkei Asia, Tesla suppliers are being advised to build components and parts outside of China and Taiwan as early as next year due to rising geopolitical uncertainties. 

The company is also seeking alternative supply sources for non-China markets to prevent supply chain disruptions.  Tesla is also reportedly discussing with suppliers from Japan, South Korea, and other Asian countries. One executive said his company is ramping up capacity in Thailand amid the impending supply change. 

Other American automakers, like General Motors and Ford, are also said to be studying moving electronics production beyond China and Taiwan.

Starting Aug 1, new tariffs on Chinese EVs and EV components will take effect. Many other Chinese imports, such as semiconductors and vital minerals used in battery production, will now face higher taxes. KR