Reasons Behind Tesla's Withdrawal of Model S and X from China | Carscoops

      The trade war between the United States and China has already produced its first casualties, notably affecting one of Trump's main supporters.

      China retaliated with tariffs of 125% following the Trump administration's rise in import duties to 145%.

      Tesla has halted orders for non-local models in China, as the ongoing trade conflict renders imports nearly unsellable.

      Elon Musk donated $277 million to Trump before voicing his opposition to the tariffs, which sparked a verbal clash.

      The trade conflict has intensified swiftly, with Donald Trump increasing tariffs on imports from China to 145%, prompting China to respond last Friday with a 125% tax on American goods. This trade war is having a detrimental effect on numerous companies globally, including those affiliated with the Department of Government Efficiency’s co-head.

      Elon Musk cautioned Trump that the tariffs would significantly affect the economy, but the President remained steadfast. Consequently, Tesla has ceased taking orders for the U.S.-manufactured Model S sedan and Model X SUV in China, substituting the "order now" button on its local website with options to "look at the car" and "schedule a test drive."

      Model 3 and Model Y are the actual top sellers anyway.

      This indicates that Tesla still has some vehicles available for sale, as it offers test drives to interested customers. The company’s logic is clear: the tariffs made the two models excessively expensive, and it cannot raise its prices, particularly because the Model S is aging, having been introduced in 2012 (even though it has received updates over the years), and the Model X has never been a strong seller.

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      Instead, Tesla relies on the Model 3 and Model Y, which were updated in 2023 in China (with an update for North America set for 2024), to maintain its presence in the largest automotive market globally. Manufacturing both at its Shanghai plant allows it to bypass hefty tariffs on U.S. imports; however, as noted by the Wall Street Journal, the tariffs only worsen its challenges.

      Musk’s insults towards Trump’s advisor will not aid Tesla.

      A 2023 analysis by Nikkei Asia indicated that nearly 40% of the battery materials for its vehicles come from Chinese suppliers. This presents a significant concern for the Trump administration, which implemented these high tariffs to make imports nearly impossible. For Musk, this poses a larger problem, especially after he publicly criticized Trump’s primary tariff advisor, Peter Navarro, labeling him “dumber than a sack of bricks” after Navarro dismissed Musk's plea for a no-tariff arrangement between the U.S. and Europe, referring to him as merely a “car assembler” seeking access to affordable foreign components.

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      “The difference is in our thinking and Elon’s on this is that we want the tires made in Akron,” Navarro stated. “We want the transmissions made in Indianapolis. We want the engines made in Flint and Saginaw, and we want the cars manufactured here.” Teslas don’t have engines, but that’s a minor detail; his stance on the issue is clear. Not one to back down, Musk retorted that “Navarro is truly a moron. What he says here is demonstrably false.”

      Protecting American Jobs While Hurting Tesla? That’s Irony.

      Both individuals can be seen as right or wrong, depending on one’s perspective. Musk requires access to affordable components to keep Tesla’s prices competitive and cannot realistically secure U.S.-based suppliers quickly, assuming there are enough to meet demand for all automakers attempting the same. Conversely, Navarro appears unconcerned about Tesla's sales or profits and is focused on enforcing Trump’s policy to eliminate China-made products from the U.S. market – period.

      The President’s tariffs aim to safeguard U.S. companies and jobs by compelling everyone to produce products locally. This approach is commendable but overlooks one detail: Tesla manufactures many of the most American cars, and harming it could lead to job losses, thus making the concept of job protection somewhat contradictory.

      Even Before Tariffs, Tesla Was Facing Challenges.

      Regardless of the animosity between Musk and Navarro, Tesla is already confronting significant challenges. Domestically, although it remains the leader in the EV market, competitors are steadily encroaching on its market share; its stock price has fallen by 34% since January, and 67% of Americans surveyed indicated they wouldn’t consider purchasing a Tesla, largely due to Musk's political stance. Internationally, the situation is worse, with European sales plummeting despite the launch of the updated Model Y Juniper. In China, discontinuing the Model S and Model X is just one of its issues, as consumers increasingly favor local brands over foreign ones, including luxury names like Mercedes, Porsche, and, of course, Tesla.

      Being the