Exclusive: Tesla has considered exporting EVs from Shanghai to U.S., Canada

SHANGHAI, Nov 12 (Reuters) – Tesla has considered plans to export Chinese-made electric cars to the United States and Canada, two people familiar with the plans told Reuters, a move that would be linked to its largest factory in North America. its largest market.

Tesla has been evaluating whether the Model 3 and Model Y electric cars produced at the Gigafactory Shanghai could be sold in North America next year, according to the people, who declined to be named because the process was confidential.

Tesla’s review has also included an assessment of whether parts produced by Tesla’s Chinese suppliers would comply with regulations in the United States and Canada, he said.

The Shanghai factory has been working to prepare a pilot batch of small-scale production vehicles in the first quarter of 2023 that meet North American export standards, one of the people said.

After Reuters published its story on Friday, Tesla Chief Executive Elon Musk, in a Twitter post, “False” without explanation. When contacted by Reuters, representatives of Austin, Texas-based Tesla did not respond or clarify Musk’s comments. A representative of Tesla in China responded with a picture of Musk’s refusal.

Reuters could not determine whether Musk’s comment would affect the possible investigation Tesla has started on exports from China to the United States and Canada, or the implementation of the policy.

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A review of what could be sent to North America from Shanghai was underway as recently as two weeks ago, according to people who spoke to Reuters and a memo detailing some of the measures being taken by the Shanghai plant to test its readiness by 2023. which was seen by Reuters.

Tesla may not be the first US automaker to export cars made in China to the United States. General Motors ( GM.N ) exported the Buick Envision SUV and only asked for an exemption from the 25% U.S. tariffs imposed by the Trump administration.

Until now, Tesla’s strategy has been to build cars for sale in North America at its plants in Fremont, California, and Austin, Texas.

Tesla’s Shanghai Gigafactory has the capacity to produce 1.1 million electric cars a year after a major upgrade earlier this year, making it Tesla’s largest production facility.

The Shanghai plant produces Model 3 sedans and Model Y crossovers for sale in China and exports to markets including Europe, Australia and Southeast Asia.

Until recently, Tesla was selling or exporting every car it made in Shanghai, but the volume of production rose sharply in October, according to data from CMBI.

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Additionally, factors such as the weaker yuan against the US dollar, lower prices in China and rising Tesla and new car prices in the United States have combined to make exports from China to the United States more competitive, folks. and knowledge of plans said.

The US portion of the export plan, if implemented, could create new challenges for Tesla buyers. Under the new electric car subsidies and manufacturing stimulus plan signed by US President Joe Biden, the incentive available for an individual car could vary depending on whether it was imported, experts said.

Tesla is known to be one of the biggest beneficiaries of the Biden Administration’s Inflation Reduction Act (IRA), which offers discounts of up to $7,500 on EV purchases as part of a law aimed at forcing automakers to reduce their reliance on China.

Tesla said in a filing with the Ontario government in July that it was working with officials there as part of an effort to establish a “high-tech manufacturing facility” in Canada.

Tesla is also ramping up production at a factory that opened in Berlin earlier this year. Output from the plant will reduce demand for other products from China, one of the sources said.

At the same time, the price gap between Tesla cars sold in China and the United States has been widening, reflecting higher US prices and new discounts in China. This means that Tesla vehicles can be shipped to North America at a competitive price.

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Reuters photos

In China, where CMBI analysts warned of a looming “price war”, Tesla cut the base prices of its Model 3 and Model Y in China by 9% last month.

On Monday, it offered an additional discount to consumers who take out this month and purchase insurance from one of Tesla’s partners.

Tesla sells the Model Y for the equivalent of $49,344 in China, compared to the US price of $65,990. Cars made in China face a 27.5% US tariff, while light trucks face 25%.

China, the world’s largest car market, imposes a 15% tax on imported cars.

In 2018, before the Tesla plant in Shanghai started operating, Musk asked then-President Donald Trump to raise the prices of cars imported into the United States from China to achieve a “fair result” where both sides had the same and “equal” prices. . .

($1 = 7.2511 yuan Chinese renminbi)

Reports by Zhang Yan, Brenda Goh; Writing by Kevin Krolicki; Edited by Anna Driver and Pravin Char

Our Standards: Thomson Reuters Trust Principles.


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