As President Trump puts new invoices in goods from China and threatens a trade war with allies such as Mexico and Canada, a world company is likely to suffer less than most of its competitors: Tesla.
But the electric car manufacturer led by Elon Musk, who represents one -third of billionaire wealth, is also vulnerable if relations with China worsen. This country is the company’s second largest market after the United States and produces more cars there than anywhere else.
Tesla has largely built autonomous supply chains in the United States and China, a rarity in a world of interconnected trade. As a result, invoices imposed by Trump’s administration on Chinese goods and the ongoing threat to put them on Mexican and Canadian products could help Tesla harm its competitors more.
Although there is no evidence that Mr Musk is shaping commercial policies, invoices are one of the various measures adopted by Trump’s administration that can benefit Tesla at the expense of his opponents. On Wednesday, Mr Trump stopped 25 percent invoices for most cars and spare parts in Canada and Mexico, but the recovery ends in a month, leaving automakers in the United States dependent on foreign supply chains.
The administration is also trying to eliminate financial support for the manufacture of rapid charging stations for electric vehicles, a move that could reduce companies seeking to compete with Tesla’s extensive network. And it is trying to reduce or eliminate the loans and subsidies that competitors such as Ford Motor and Rivian use electricity and batteries to finance plants.
Mr Musk said next to anything about the trade or crusade of the administration to promote fossil fuels and preventing electric vehicles, which could also harm Tesla. And his support for Mr Trump has inspired protests in Tesla delegations and weighs the price of Tesla’s share. But his position as a de facto member of Mr Trump’s cabinet gives him an influence that far exceeds any other Auto Executive.
“The conflict of interest puts it very gently here,” said John Helveston, Assistant Professor at George Washington University who teaches engineering management.
Tesla did not respond to a request for comments. A White House official said his policies preceded Mr Musk’s support for Mr Trump.
“President Trump has firmly hit Biden’s electric vehicles on the campaign trail since the summer of 2023-more than a year before Elon Musk has even approved President Trump-and has firmly pressed companies to have their products to be in America since 2015. White House.
Commercial policies and other Trump policies also have risks to Tesla when the company is already in crisis, with sales falling in China and Europe, even when the overall market of electric vehicles is increasing.
Mr Musk’s extensive investments in China leave him vulnerable as commercial tensions between the Chinese government and Trump’s administration.
“It could be a pawn on all this,” said Lei Xing, an independent car analyst based in China.
Tesla is already competing in Europe and China due to competition from Chinese electric highways and a lack of new models. The anger of Mr Musk’s political activities, including the promotion of far -right parties, has also harmed demand in Germany, the United States and other markets. Mr Musk’s personal wealth is linked to the Tesla stock, which is in a sharp fall.
When Tesla started mass electric cars at a factory in Fremont, California, in 2012 it designed a supply chain that was less dependent on imports than almost all its competitors. Electric vehicles were a new technology, forcing Tesla to largely develop its own sources of battery, engines and other components.
Tesla created a battery factory in Nevada in collaboration with Japan’s Panasonic and remains one of the few car companies for mass batteries in the United States.
When, in 2014, Mr Musk began talking about building a factory in China, he received a warm welcome from government officials. Tesla opened a factory in Shanghai six years later under unusual favorable conditions. Beijing has changed the rules of ownership so that the company can be installed without a local partner, a first for a foreign automaker in China. The Chinese government also secured low interest rates, access to leading leaders and even changes that Tesla had pursued in broadcast regulations.
However, Mr Musk maintained the supply chains for the Chinese and US factories relatively separately, unlike other car companies that are largely dependent on imported parties.
“He himself put himself fine himself if the trade goes sideways and the invoices go higher,” said Michael Dunne, a long -standing adviser to the China car industry. “And that serves him well today.”
Today, cars manufactured in Shanghai are sold in Europe, Southeast Asia or the domestic Chinese market – but not in the United States.
Tesla cars sell in the United States are manufactured in factories in Fremont and Austin in Texas. Tesla also produces billing equipment for the private charging network-the largest nation-in Buffalo, Ny Tesla, regularly occupies an annual ranking from Cars.com, a web site on the Internet, for how much a vehicle is American.
“Tesla is in a good position” to withstand invoices, said Patrick Masterson, who oversees the collection of data that goes to Cars.com. “Their domestic production is strong.”
Tesla is still vulnerable to invoices for goods from China and Mexico, because a quarter of components and materials in the car, measured by value, according to data compiled by the National Traffic Security Administration. But electric vehicles from Tesla competitors are much more vulnerable to invoices.
Chevrolet Equinox Sport Vehicle of General Motors, for example, is in Mexico. At a starting price of $ 34,000, battery -powered Equinox is a threat to the Tesla Model Y model, which starts at $ 45,000 before government incentives. Trump’s 25 % invoice will delete most of this advantage, assuming it is.
The risk for Tesla in China is more difficult to measure. So far, Chinese leaders seem to see Mr Musk’s role in Trump’s administration as an advantage, seeing him as a possible point of contact. In January, when Han Zheng, China’s vice president flew to Washington to attend the inauguration of Mr Trump, he met with Mr Musk.
“US-China policy often works through specific personal relations,” said Ilaria Mazzocco, a senior partner in Chinese business and economy at the Center for Strategic and International Studies, a Washington think tank. “There is hope in China that it could play a constructive role.”
But Mr Musk has also lost some negotiating force in China.
When the Chinese leaders did the Shanghai plant, Tesla was considered as a leader of technology that would promote the development of the EV industry. With sales falling in Europe and weakened in China, however, Tesla production in Shanghai decreased by 50 % in February since the previous year. Chinese automakers such as BYD and Xiaomi introduce new models that compete with Tesla in features such as autonomous driving.
Tesla’s prestige and leverage 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, on the other hand, can check Tesla.”
However, China would probably think twice before Tesla and Mr Musk targeted, because this could make it more difficult to attract foreign investment, said Wang Yanhang, a colleague at the Institute of Financial Studies at Chongyang at Renmin University. “China won’t shoot itself on foot,” she said. “It’s the last choice.”
China has so far surpassed cars in contradiction against Trump’s administration invoices for Chinese goods, instead of increasing the duties of American agricultural products such as chicken and wheat.
Tesla fought quietly at least one possible invoice on Chinese materials that would have a direct impact on its competitiveness.
China is the main source of high purity graphite, a basic battery material. In December, a group of companies trying to produce battery quality in the United States accused China for dumping and asked the US International Trade Committee to impose punitive duties that could exceed 800 %.
At a hearing on the issue in January, Tesla hired a prominent Washington law firm to support his case and four Tesla executives spoke, according to public documents. Tesla “is pushing back because they do not see an alternative to Chinese toner,” said Iola Hughes, head of the Rho Motion research, who monitors the battery industry.
Last month, the commercial organization said there was a “reasonable indication” that Chinese toner exports hurt US producers. The organization has not issued a final decision. Mr Trump’s rhetoric in commerce did not include any reference to toner.
Joy dong They contributed reports.
