Tesla's Elon Musk rules out China exports to the US

Tesla’s Elon Musk rules out China exports to the US

Elon Musk has dismissed a report claiming there are plans to export Tesla cars from China to the US – although lower manufacturing costs reportedly offset high tariffs on Chinese imports to the US.

Tesla CEO Elon Musk has refuted a report claiming the company is preparing to export Chinese-built electric cars to the US and Canada.

news agency Reuters reported that Tesla was “considering” plans to export Model 3 and Model Y electric cars from its Chinese factory to North America starting early next year, citing “people with knowledge of the plans.”

Tesla’s Chinese factory currently serves global markets such as China, Europe and Australia. Meanwhile, Tesla vehicles sold in North America are built in the United States.

Chinese-made passenger cars are currently subject to a 27.5 percent import tariff in the United States.

However, according to the report by ReutersFavorable exchange rates, lower commodity prices in China and rising US new car prices could “potentially” make Chinese exports a viable option.

Shortly after Reuters When the story was released, Tesla CEO Elon Musk called it “wrong.” Twitter. Tesla representative contacted by Reuters declined to comment further on Musk’s social media post.

The Chinese Tesla factory until recently “sold or shipped for export every vehicle it could produce.” Reuters reported.

However, demand for Tesla motor vehicles in China has started to wane, leading to more inventory ready for sale and increased production capacity for other countries.

Reuters reports that Tesla’s Shanghai factory — dubbed Giga Shanghai — has the capacity to build up to 1.1 million vehicles annually — making it the electric-car specialist’s largest manufacturing base — though Tesla’s latest financial report only put a capacity of “more than 750,000” cars per year lists.

According to the news agency, Tesla is “working toward plans to build” a small-batch test run of production vehicles [early] 2023, which would meet North American standards for potential export.”

Reuters says the gap between Tesla prices in the US and China is “widening” – reflecting rising US prices and new rebates in China – suggesting Chinese exports to the US are now possible despite the high tariff are.

However, any Chinese-made Tesla sold in the U.S. would not be eligible for the upcoming U.S. government tax incentives for electric cars, which require vehicles to be built in North America and source significant portions of the materials in their batteries from the U.S a country with which it has a free trade agreement.

Tesla CFO Zach Kirkhorn told investors last month the company “believes[s]“it’s well positioned to capture a significant portion of it [tax credit] for solar storage and also electric vehicles,” added, but the terms of the loan would not be finalized until the end of this year.

In addition to its factories in the US and China, Tesla recently opened a plant in Berlin, Germany, which will build some Model Y SUVs for the European market and reduce the load on the Shanghai plant. Tesla is reportedly considering opening a factory in Canada.

Tesla would not be the first US automaker to import Chinese-made cars into the US since the new tariff was introduced, Reuters Grades; Buick, a brand owned by General Motors, is importing the Chinese-built Envision large SUV to North America.

Alex Misoyannis

Alex Misoyannis has been writing about cars since 2017 when he launched his own website Redline. He worked for Drive in 2018 before joining CarAdvice in 2019 and becoming a regular journalist on the news team in 2020. Cars have played a central role in Alex’s life, from leafing through car magazines at a young age to growing up surrounded by performance vehicles in a car-loving family.

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