Tesla
has ceased taking orders for shipping Model S and Model X electric vehicles (EVs) to China, since this once leading indicator of the nation’s automotive market has been significantly impacted by the reciprocal actions.
tariff war
Between the United States and China.
According to two sales managers, the automaker has ceased accepting orders for importing U.S.-made versions of their vehicle models. Instead, they plan to encourage customers to look at the locally manufactured Model Y and Model 3 cars produced at their Gigafactory near Shanghai.
Following the increase in import tariffs imposed by China on all U.S.-made goods, the change was implemented.
50 percentage points to 84 percent
earlier this week, matching the punitive duties levied by US President Donald Trump on Chinese products. The additional duties raised the price of the Model S sedan to more than 1.26 million yuan (US$172,260), while the Model X SUV is priced from 1.33 million yuan.
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The increased tariffs, which clash with China’s intense pricing battle where numerous electric vehicle manufacturers compete to offer an abundance of model options, quickly make Tesla more expensive compared to its competitors such as
BYD
,
Xpeng
,
Xiaomi
and
Zeekr
, offering more affordable versions with equivalent, if not better, specs.
Tesla China did not reply to inquiries from the Post, yet numerous Chinese customers reported being unable to make new purchases of Model S and Model Y on Friday.
The trade conflict between the globe’s two biggest economies and automotive manufacturers shows no indication of slowing down. Last Friday, China increased comprehensive tariffs on all U.S.-made goods to 125 percent, aligning with the Trump administration’s imposed rate of 145 percent.
Chinese buyers won’t pay more than double for a Model S or Model X, despite their interest,” stated Zhao Zhen, the sales manager at Shanghai’s Wan Zhuo Auto dealership. “Luxury models like these aren’t major contributors to Tesla’s performance in this market.
The sales figures of the Model S and Model X in China, the world’s largest EV market, are not available. According to Tesla’s report on its first-quarter production and deliveries, it handed over 12,881 Model S, Model X and Cybertruck vehicles to customers worldwide between January and March, which represented less than 4 per cent of its total sales.
When Tesla began building its manufacturing facility on the mainland, it became the first foreign automaker to have full ownership of an assembly plant there.
Shanghai Gigafactory
In 2018, prior to this, international automobile manufacturers were required to establish joint ventures with Chinese firms, holding no more than a 50 percent stake.
Since the introduction of its Shanghai-produced Model 3 at the start of 2020, Tesla has taken the lead in the luxury electric vehicle sector within Mainland China.
Before the tariff war, Tesla’s Model S, Model X, and Cybertruckpickup faced a 25 percent import tax when sold to consumers on the Chinese mainland. These extra duties would be added to the standard import levy.
China’s automotive part manufacturers are significant casualties of the tariffs imposed by the United States. Approximately 100 billion yuan worth of components – including electric vehicle batteries, LiDAR sensors, and driving control systems – face potential threats due to these trade measures.
According to customs statistics, last year, the automotive suppliers from the mainland exported goods worth 99.8 billion yuan overseas, accounting for approximately 15 percent of China’s overall automobile parts exports.
Tesla’s first-quarter deliveries on the mainland slumped 22 per cent to 172,754 units, hitting the lowest level in three years, according to data from the China Passenger Car Association.
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The article initially appeared on the South ChinaMorning Post (www.scmp.com), which serves as the premier source for news coverage of China andAsia.
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