Tesla Asks Trump administration For a Tariff Exemption

Tesla has placed a request with the Trump administration to get an exemption from the new 25 percent tariffs on some Chinese-made products for a critical part on the Model 3. Even though Tesla currently produces all its vehicles in the US, it still relies on Chinese suppliers for some specific parts, which could be difficult to make in the US. That’s  the case for a computer inside the Model 3 that Tesla describes as “the brain of the vehicle.”

Last year, President Trump announced a series of new tariffs on Chinese goods as part of an intensifying trade war with China. One of the goals was to convince American companies to keep more of their production in the US.

Tesla is among a host of companies, including No. 1 U.S. automaker General Motors Co, to warn of growing costs related to the tariff war between the world’s two largest economies.

https://www.reuters.com/article/us-autos-tariffs-tesla/tesla-urges-tariff-exemption-for-chinese-made-car-computer-brain-idUSKCN1OZ00C

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Great article. Seems like Tesla can hit a wall with these tariffs - in terms of their profitability streak. They might have to bit the bullet on this one. No way can they switch suppliers without risking quality. Might as well just stick with their current supplier will be too expensive to switch over to any other. 

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If the guess that the $500 for the part is accurate the tariff is only $125. Instead of reducing the price by $2000, just reduce it by $1875. That maintains the profit and doesn't put the company in the position of asking for special treatment.

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This trade war unfortunately is really affecting not just Tesla but other companies too. Tesla has increasing cost of making vehicles because of the tariffs on Chinese parts and it also has to increase its prices of the same vehicles in China because of the retaliation with tariffs on American goods. 

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Of course it affects Tesla but with so much of their stuff made in-house I expect it to hurt other US automakers more. It's a win for European, Japanese and Korean cars. And is it possible that this computer can't be made in the US but just in China? 

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