Tesla has suspended plans to import components from China for its Cybercab and Semi electric truck to the United States after President Donald Trump raised tariffs on goods from Beijing. This is reported by Reuters, writes UNN.
Details
According to the publication, this step could potentially harm Tesla's ambitions to create autonomous vehicles and trucks, which CEO Elon Musk has repeatedly called the next stage of growth for the struggling electric car manufacturer.
Tesla was able to cover the additional costs when Trump introduced tariffs of 34% on Chinese goods, but could not withstand even higher tariffs, which led to the suspension of supply plans, according to a Reuters report citing a person familiar with the situation.
Trump raised tariffs on Chinese goods to a total of 145% in early April, marking the beginning of a tough, renewed trade war between the world's two largest economies.
The components that Tesla imports are also subject to Trump's additional 25% tax on imported cars and auto parts.
Musk noted last month the "significant" impact of tariffs on Tesla. Although the company manufactures all cars for sale in the US domestically, it imports a number of key components from around the world, with China playing an important role in the supply chain.
The exchange of tariffs between the US and China potentially foreshadows new difficulties for Tesla, which is already facing declining sales due to an outdated model line, strong competition from Chinese manufacturers and a shift in consumer preferences towards hybrids instead of fully electric cars.
Tesla is also facing a boycott from consumers, especially in Europe, due to CEO Musk's political ties.
Tesla did not respond to requests for comment.
Addition
The company is also applying for approval from individual state governments as it plans to launch a robotaxi service with a fleet of Cybercabs. In October, it unveiled a concept of a driverless taxi without a steering wheel or pedals, promising to start production of a two-seater model by 2026 for less than $30,000.
Tesla also plans to increase production of Semi electric trucks in 2026 and accelerate deliveries of long-delayed orders, including for Pepsi.
The impact of the new tariffs on Tesla's key business plans demonstrates how Trump's policies aimed at supporting American production could harm his ally Musk. Musk has repeatedly stated on social media that he supports free trade and opposes tariffs.
The White House notes that Musk is leading a reform of the American bureaucracy, which has resulted in the reduction of thousands of government positions.
As the Washington Post reported last week, Musk made a personal appeal to Trump to cancel the new tariffs around the world, posting a video of how the creation of a simple pencil requires a global supply chain.
Tesla also stopped accepting new orders for Model S and Model X models after China responded by imposing a 125% tariff on American goods.
According to an S&P report for February, the US accounted for approximately 15-20% of the value of Chinese auto parts exports in recent years.