Tesla moves to eliminate China-sourced components in US vehicles

Tesla is actively reducing its reliance on China-sourced components for vehicles produced in the US, following a broader industry trend exemplified by companies like General Motors. The company has already replaced some China-made parts with alternatives from other countries and plans to transition all remaining China-made components within the next year or two. This shift was initially prompted by supply chain disruptions during the Covid-19 pandemic and has accelerated due to steep US tariffs on Chinese imports and geopolitical tensions affecting chip supplies. Tesla’s sales of China-made electric vehicles have also declined sharply, with a nearly 10% drop in October compared to the previous year and a 32.3% decrease in production at its Shanghai plant from September. The US remains Tesla’s largest market, where vehicles are manufactured domestically. Additionally, Tesla has instructed thousands of suppliers to eliminate China-made components, reflecting a wider push among US automakers to reduce dependence on Chinese parts amid export restrictions on rare earths and magnets critical for vehicle production.