Tesla has stopped taking orders in China for two models it previously imported from the US, as companies scramble to adapt to prohibitive tariffs imposed in Donald Trump’s trade war.
The manufacturer, run by Trump’s close ally Elon Musk, removed “order now” buttons on its Chinese website for its Model S saloon and Model X sports utility vehicle.
Tesla did not give any indication of why it had made the changes but it came after the rapid escalation of the trade war between the US and China. In tit-for-tat moves, Trump has raised total tariffs on China to 145%, while China responded on Friday by increasing its levies on US exports to 125%.
The border taxes make the goods trade between the two countries prohibitively expensive and mean cars imported from the US are now much less attractive in China than those produced locally.
New orders for the two imported models were also no longer available on Tesla’s mini-program account on the Chinese social media app WeChat, Reuters reported. The “order now” buttons were replaced with “view available cars” for the Model S and Model X on the US carmaker’s website, with some remaining cars appearing to be available for Chinese buyers.
Since 2020 Tesla has produced its Model 3 and Model Y cars in a large factory in Shanghai, giving it some insulation from the tariffs. However, the company is still likely to be heavily affected. Analysis by Nikkei Asia in 2023 suggested that about 40% of the companies supplying Tesla with battery materials were Chinese, although the carmaker has sought to source parts and materials from outside China as trade tensions between the US and China have increased.
Musk has been a key player in the Trump administration, leading the “department of government efficiency”, or Doge, in its efforts to slash the US federal budget that have been described as illegal by constitutional experts. Yet he has also appeared to criticise the tariffs, saying last week that there should be “zero tariffs” between the EU and US. That is a stark contradiction to the 10% tariffs imposed by Trump on every nation in the world for 90 days, with the threat of the return of even higher levies.
Tesla last month warned the US government that tariffs could harm American companies, in a letter to the White House’s trade representative.
The possible loss of orders would represent a significant financial blow to Tesla, at a time when it is already struggling with slumping demand, particularly in Europe. Although it is tricky to work out the motivations of buyers, analysts have said that Musk’s close association with Trump has tarnished the brand, contributing to the sales slump. The company also has an ageing lineup of models that are struggling to compete with newer offerings, particularly from Chinese rivals such as BYD.
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Dan Ives, an equity analyst at Wedbush Securities, an investment bank, argued last week that Tesla was still undervalued, despite it being the most valuable carmaker in the world, at an $812bn market valuation on Friday. However, he said the company was facing a “full-blown crisis” and that Musk needed to leave the Trump administration.
Tesla was approached for comment.
