While President Trump puts new tariffs on goods from China and threatens a trade war with allies like Mexico and Canada, one global company is likely to suffer less than most of its competitors: Tesla.
But the manufacturer of electric cars led by Elon male, which makes a third of the richness of billionaire, is also vulnerable if relating to China worsen. This country is the second largest company market after the United States and produces more cars there than anywhere else.
Tesla has built mainly self -sufficient supply chains in the United States and China, which is a rarity in the world of interconnected trade. As a result, the Tariffs that Trump’s administration has introduced to Chinese goods, and a constant threat to put them on Mexican and Canadian products could help Tesla by hurting their competitors more.
Although there is no evidence that Mr. Musk forms trade policies, tariffs are one of several measures that Trump administration adopted that could benefit from Tesla at the expense of his rivals. Wednesday, Mr. Trump paused 25 percent of tariffs On most cars and parts made in Canada and Mexico, but the return expires in a month, leaving car manufacturers in the United States depending on the external supply chains in the uncertainty state.
The administration also tries to eliminate financial support for the construction of electric vehicles quickly, which could be handicapped by companies that want to compete with Tesla’s extensive network. And trying to reduce or eliminate loans and subsidies that competitors such as the Ford Motor and Rivian use to finance electric vehicles and batteries factories.
Mr. Musk said that nothing about the trade or crusade of the administration of administration to promote fossil fuels and interfere with the sale of electric vehicles, which could also harm Tesla. And his support to Mr. Trump inspired protests in Tesla’s MP and Vagala on Tesla’s share price. But his position de facto member of Mr. Trump’s cabinet gives him an influence that far exceeds any other executive director.
“The conflict of interest is very slightly put here here,” said John Helveston, Assistant Professor at George Washington University who teaches engineering management.
Tesla did not answer the commentary request. The White House official said her policies preceded the support of Mr. male Mr. Trump.
“President Trump has consistently slammed Bide’s electric vehicles to kill the campaign trail from the summer of 2023, over a year before Elon Musk even supported President Trump, he consistently pressed the company to produce products in America since he first led for President 2015,” said Kush Desai.
Trade war and other Trump policies also have a risk of Tesla when the company is already in crisisSince the sale has fallen in China and Europe, even if the overall is an electric vehicle market.
The extensive investment of Mr. Musk in China leave him vulnerable because trade tensions between the Chinese government and Trump’s administration increase.
“He could become a dedicator in all this,” said Lei Xing, an independent car analyst based in Massachusetts, who was focused on China.
Tesla is already fighting in Europe and China due to the competition of Chinese electric car manufacturers and lack of new models. Anger due to the political activities of Mr. MuskIncluding the promotion of the extreme right side, it also harmed the demand in Germany, the United States and other markets. Personal wealth of Mr. Musk is bound in Tesla’s stock that was on a steep fall.
When Tesla began to produce electric cars in Fremont in 2012 in 2012, California designed a supply chain that is less dependent on imports from almost all its competitors. Electric vehicles were then new technology, forcing Tesla to largely develop their own sources of batteries, engines and other components.
Tesla built a battery factory in Nevada in partnership with Panasonin from Japan, and remains one of only a few cars for mass production of batteries in the United States.
When Mr. Musk began talking about the construction of a factory in China in 2014, he welcomed the Government officials. Tesla opened a factory in Shanghai six years later unusually favorable conditions. Beijing changed its ownership rules so that the company could establish without a local partner, the first for a foreign car manufacturer in China. The Chinese government also provided low interest loans, access to top leaders, and even the changes that Tesla sought in regulations on shows.
But Mr. Musk kept the supply chain for Chinese and American factory relatively separate, unlike other car companies that depend greatly on the imported parts.
“He set himself nicely in case the store goes aside, and Tariffs go more,” said Michael Dunne, a longtime China Automotive advisor. “And that serves him well today.”
Today, cars are made in Shanghai for sale in Europe, Southeast Asia or in the domestic Chinese market – but not in the United States.
Tesla cars sells in the United States are produced in factories in Fremont and Austin in Texas. Tesla also manufactures charging equipment for its charging networking networking country to Buffalu State, NY Tesla regularly at the top is Cars.com, web site for Internet shopping, how much American production is vehicles.
“Tesla is in a good position” to endure the tariff, said Patrick Masterson, who supervises the composing data that goes into the ranking of the car. “Their homemade production is robust.”
Tesla is still sensitive to goods on goods from China and Mexico, as a quarter of the components and materials in the car, measured in value, is introduced, according to data composed by the National Road Traffic Safety Administration. But the electric vehicles made by Tesla competitors are much more sensitive to the tariffs.
For example, General Motors’ Chevrolet Equinox Sports Municipal Vehicle was made in Mexico. With a starting price of $ 34,000, Equinox on the battery threatens Tesla’s model Y, which starts at $ 45,000 before the Government incentives. A 25 percent of the Trump administration tariff will erase most of these benefits, assuming that it stands.
The risk of Tesla in China is harder to evaluate. So far, Chinese leaders seem to see Mr. Musk’s role in Trump’s administration as a plus, Looking at him as a potential contact point. In January, when Han Zheng, the Chinese vice president flew to Washington to attend Mr. Trump’s inauguration, met with Mr. Male.
“The US-kine policy has often worked through specific personal relations,” said Ilaria Mazzocco, a senior associate in Chinese business and economics at the Center for Strategic and International Studies, Washington Think Tank. “There is hope in China that he could play a constructive role.”
But Mr. Musk also lost some negotiating power in China.
When the Chinese leaders illuminated the Shanghai factory, Tesla was seen as a technological leader that will stimulate the development of the EV industry. Since the sale fell in Europe and weakening in China, however, the production of Tesla in Shanghai fell 50 percent in February in February earlier. Chinese car manufacturers love Byd and Xiaomi They introduce new models that rival Tesla in features such as autonomous driving.
Tesla’s prestige and influence in China can be reduced as a result.
“Tesla can no longer control China,” said Jia Xinguang, an independent car analyst in Australia. “But China, in contrast, can control Tesla.”
Still, China would probably think twice before targeting Tesla and Mr. Musk, because it could make it difficult to attract foreign investments, said Wang Yanhang, a colleague at the Chongyang Financial Studies Institute at Renmin University in Beijing, which accompanies trade issues. “China will not shoot in the leg,” he said. “That’s the last option.”
China has been riding from a car so far when she avenged Trump’s trumpy tariffs on Chinese goods, instead Raising duties to US agricultural products like chicken and wheat.
Tesla fought quietly with at least one potential tariff on Chinese materials that would have a direct impact on his competitiveness.
China is a major source of high -purity graffiti, an essential battery material. In December, a group of companies trying to produce a battery for a battery in the United States has accused China for rejection and asked the US Commission of International Trade of imposing criminal duties that could be more than 800 percent.
At the hearing on this issue in January, Tesla hired a reputable lawyer’s company Washington who would claim his case, and four Tesla managers spoke Public documents. Tesla “pushes back because they do not see the alternative to the Chinese graffiti,” said Iola Hughes, a research manager at RHO Motion, who follows the battery industry.
Last month, the trade agency said there was a “reasonable indication” that Chinese export of graffiti was damaging to US manufacturers. The agency did not make the final decision. Mr. Trump’s rhetoric about the trade did not include any mention of graffiti.
Joy Dong contribute to reporting.
