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Tesla Has Thought About Exporting Evs From Shanghai To The United States And Canada


Tesla Has Thought About Exporting Evs From Shanghai To The United States And Canada
Tesla has considered plans to export made-in-China electric vehicles to the United States and Canada. This would connect Tesla's largest factory to North America, its largest market, according to a report from the news agency Reuters quoting information from people with knowledge of the planning,
According to the people who declined to be identified because the process was private, Tesla has been assessing whether electric cars made in Shanghai's Gigafactory could be sold in North America as early as next year.
According to them, Tesla's evaluation took into account whether parts produced by Tesla's Chinese suppliers would be compliant with laws in the US and Canada.
According to one of the sources, the Shanghai plant has been working on a preliminary plan for a small-batch test run of vehicle production in the first quarter of 2023 that would be in compliance with North American standards for potential export.
Elon Musk, the CEO of Tesla, simply wrote "False" on Twitter after Reuters published its article on Friday. When contacted by Reuters, Tesla's Austin, Texas-based representatives declined to comment or elaborate on Musk's statement. A screenshot of Musk's denial was provided in response by a Tesla representative in China.
Reuters was unable to determine how Musk's remark would affect either the execution of the plan or the feasibility study Tesla had started on exports from China to the United States and Canada.
According to the individuals who spoke with Reuters and a memo outlining some of the steps being taken by the Shanghai plant to test its readiness by early 2023, the evaluation of potential exports to North America from Shanghai had been developing as recently as the previous two weeks.
Tesla wouldn't be the first American automaker to import vehicles from China. General Motors imported the Buick Envision SUV and unsuccessfully requested a waiver from the 25% Trump administration U.S. tariffs.
The cars that Tesla sells in North America are currently built at its plants in Fremont, California, and Austin, Texas.
After an upgrade earlier this year, the Shanghai Gigafactory of Tesla can now produce 1.1 million electric vehicles annually, making it the company's most productive manufacturing facility.
Model 3 sedans and Model Y crossovers are produced in Shanghai for domestic consumption as well as export to regions like Europe, Australia, and Southeast Asia.
Tesla had been selling or exporting every vehicle it could make in Shanghai up until recently, but according to data from brokerage CMBI, inventory levels increased in October by the largest margin ever.
The yuan's depreciation against the dollar, China's lower raw material costs, and the rise in Tesla and new-car prices in the US have all combined to potentially lower the cost of exports from China to the US, according to the people with knowledge of the plans.
If the U.S. portion of the export plan is put into effect, Tesla buyers may experience additional complexity. According to the terms of a new subsidy and production incentive plan for electric vehicles signed into law by U.S. President Joe Biden, the incentive offered for a specific vehicle may differ depending on whether it was imported, according to analysts.
The Biden administration's Inflation Reduction Act (IRA), which offers rebates of up to $7,500 on EV purchases as part of a law intended to push automakers to reduce their reliance on China, has been widely viewed as one of the major beneficiaries. Tesla has been one of the major beneficiaries of the IRA.
In a filing with the Ontario government in July, Tesla stated that it was collaborating with local officials to establish "an advanced manufacturing facility" in Canada.
Additionally, Tesla is stepping up production at a facility it opened earlier this year in Berlin. One of the sources claimed that the plant's output will lessen the need for some Chinese exports.
The price difference between Tesla vehicles sold in China and the US has been growing concurrently as a result of both higher US prices and fresh discounts in China. That suggests that Tesla vehicles might be sold at a reasonable price in North America.
Tesla reduced the starting prices for the Model 3 and Model Y in China by as much as 9% last month, despite predictions from CMBI analysts of an impending "price war" in the country.
For customers who take delivery this month and purchase insurance from one of Tesla's partners, it offered an additional rebate on Monday.
In China, Tesla sells the Model Y for the equivalent of $49,344 as opposed to $65,990 in the United States. Light-duty trucks are subject to a 25% tariff while cars made in China are subject to a 27.5% tariff.
The largest auto market in the world, China, levies a 15% tariff on imported cars.
Before Tesla's Shanghai facility began producing cars, Musk asked then-President Donald Trump to increase tariffs in order to "achieve a fair outcome" where both sides had equivalent and "equally moderate" tariffs on cars imported to the United States from China.