Tesla requires suppliers to avoid China-made parts for US cars, WSJ reports

(Reuters) -Tesla is now requiring its suppliers to exclude China-made components in the manufacturing of its cars in the United states, the Wall Street Journal reported on Friday. The Elon Musk-led automaker and its suppliers have already replaced some China-made components with parts made elsewhere. Tesla is aiming to switch all other components to those made outside of China in the next year or two, the report said, citing people familiar with the situation. Tesla executives have been battling with uncertainty brought by fluctuating tariff levels in the U.S.- China trade battle, making it difficult for the carmaker to formulate a coherent pricing strategy, the Journal added. Tesla has for the past two years been increasing the proportion of parts sourced from North America for its U.S. factories after mounting tariff threats, Reuters reported in April. Reuters could not immediately verify the report. Earlier this month, data from the China Passenger Car Association showed that Tesla's China-made electric vehicle sales fell 9.9% to 61,497 units in October from a year earlier, reversing a 2.8% increase in September. Sales of the U.S. automaker's Model 3 and Model Y vehicles made at its Shanghai "gigafactory", including exports to Europe, India and other markets, dropped 32.3% from September. Geopolitical tensions between the two superpowers have left car executives in triage mode throughout 2025. U.S. President Donald Trump’s on-again, off-again tariffs and bouts of industry panic over potential rare-earth bottlenecks and computer-chip shortages have auto companies rethinking their ties to China, long an important source of parts and raw materials. Earlier this week General Motors directed several thousand of its suppliers to scrub their supply chains of parts from China. (Reporting by Harshita Meenaktshi and Anusha Shah in Bengaluru, Editing by Louise Heavens)

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