Due to the escalating trade tensions between the USA and China, Tesla has suspended orders for the two more expensive models, S and X, on its Chinese website. The decision follows the drastic tariff increases initiated by the USA under Trump, to which Beijing has responded with counter-tariffs.
Background of the Tariff Dispute
US President Donald Trump had increased import tariffs on Chinese products to up to 145%, prompting China to counter with a tariff rate of 125%. These countermeasures also affect Tesla, although the S and X models account for only a small share of total sales in China. According to market researchers, only about 2,000 vehicles of these high-end models were sold in China last year, while the locally produced models 3 and Y in Shanghai sold more than 660,000 units.
Impacts and Reactions
The order stop for the S and X models highlights the challenges international car manufacturers face in the current tariff dispute. For Tesla, the tariff dispute mainly affects the more prestigious high-end segment, which is more lucrative but also more vulnerable to geopolitical risks. In parallel with these developments, dark clouds are also gathering at the European site: a planned reduction in staff at the Berlin plant has been announced, affecting significantly fewer than 3,000 employees.
US media reports that Elon Musk allegedly tried to persuade Trump to adopt a more moderate approach to import tariffs last weekend – an initiative that has so far only had partial effect. The ongoing tariff conflicts lead to uncertainty in international business and could have long-term impacts on Tesla's global strategy.
Conclusion
With the order stop of the S and X models in China, Tesla is responding to the challenging conditions created by the ongoing tariff dispute. Even though these models account for only a small share of sales in China, this measure underscores the geopolitical risks to which even leading electric vehicle manufacturers are exposed. It remains to be seen how the further development of the trade conflict will affect Tesla's global strategy and sales.
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