Tesla has stopped selling two of its models in China amid an escalating trade war with the US.
Chinese buyers can no longer press “order now” on the Model S and Model X, which are made in the US, the the South China Morning Post reports. Tesla has not commented on why it removed this option, but it did so after China hiked tariffs on US products to 125%, following President Trump setting them at 145% for products imported into the US from China.
That means Tesla faces paying a hefty tariff itself or passing the cost to customers. Chinese buyers, however, are unlikely to want higher-priced Teslas given the many competitive alternatives available to them from brands like BYD. They can also still purchase a Model 3 or Model Y, which Tesla manufactures at its Shanghai gigafactory.
“No Chinese buyers will accept paying more than twice the money to own a Model S or Model X even if they are keen,” Zhao Zhen, a sales director at Shanghai-based dealer Wan Zhuo Auto, tells the SCMP. “After all, the luxury models are not the main drivers of Tesla’s business here.”
Tesla’s Shanghai gigafactory (Credit: VCG / Contributor / Visual China Group via Getty Images)
As the SMCP notes, Tesla was already paying a 25% import duty prior to the tariff showdown.
It may not make a huge dent in Tesla’s Chinese sales. The Model S, X, and Cybertruck make up about 5% of Tesla’s sales globally, while the remaining 95% goes to the more affordable Model 3 and Model Y. Tesla’s sales in China were also up 19% last month, according to CNEV Post, fueled by the revamped Model Y. But it’s still unwelcome news for the company, which is trying to recover from a 13% sales decline in Q1.
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In the US, a new, more affordable Cybertruck trim may help spur sales. The so-called Long Range Rear Wheel Drive (RWD) variant starts at $69,990 or $62,490 after the $7,500 federal tax credit. That’s $10,000 cheaper than the All Wheel Drive (AWD) version, which starts at $79,990 before incentives. The top-of-the-line Cyberbeast is $99,990.
That may not be enough to have a significant impact on Tesla’s sales since the Cybertruck is a more niche vehicle. Tesla also started selling a new Model Y in the US last month, following its Chinese debut, but it has not significantly updated its lineup in some time.
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About Emily Forlini
Senior Reporter
