US tariffs likely to disrupt Tesla supply chains
That’s according to an unnamed insider with direct knowledge of the matter who spoke to the news agency Reuters. The article suggests that this could delay the mass production of the two models. It remains unclear how long the delay could last.
Reuters does not specify which components are affected, so it’s uncertain how quickly – or even if – US-based suppliers could replace them. Reportedly, the sheer scale of the tariffs on Chinese imports was the main reason for halting shipments. According to the insider, Tesla was initially prepared to absorb the additional costs when US President Donald Trump first imposed a 34 per cent tariff on Chinese goods. However, when Trump raised the China tariffs to 84 per cent – and later to 125 per cent (bringing the total duties on Chinese goods to 145 per cent) – Tesla is said to have pulled the plug.
The US carmaker has not responded to a request for comment, so there is no official statement from the company regarding the matter. While Tesla has been working to increase the proportion of parts sourced from North America for its US factories, especially given the escalating trade tensions, a complete decoupling from Chinese components has so far proved impossible. This includes semiconductors, a range of electronic components, and batteries (even though the Semi truck will be fitted with Tesla’s own 4680 cells). However, many battery precursor materials are still sourced from China, meaning that Tesla’s own battery production likely cannot rely solely on domestic supply chains.
According to Reuters, deliveries of the affected components had been scheduled to begin in the coming months, as Tesla hopes to start pilot production of the Cybercab at Giga Texas in October, and plans to scale up production in 2026. That year is also set to see a significant ramp-up of the Semi’s production at the Nevada facility.
The tariff dispute between the US and China has already impacted Tesla elsewhere: the carmaker is currently no longer accepting orders for the Model S and Model X in China. These premium models are built exclusively at Tesla’s Fremont facility in California and exported to China. However, as China has retaliated by imposing its own 125 per cent tariffs on US imports, the Model S and Model X are now likely unprofitable to sell in the Chinese market. The Model 3 and Model Y, which are produced locally in China, continue to be offered there.
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