Why Tesla Is Pushing for Lower EV Tariffs

There's no way Tesla can make all their cars in just one country—it's just not possible nowadays. One part might be made in Canada, others in Mexico or China. Why? Cost. Sometimes it's way cheaper to have a part made somewhere else than to do it in-house.

That part’s pretty obvious. Tesla can't build everything in the U.S., and honestly, a lot of their parts are probably made overseas. I read somewhere that they’ve got a company in China where a bunch of parts are made and assembled. Even their cheapest car uses a lot of Chinese-made components (branded as Tesla, of course) because it’s just more affordable. I doubt the Model 3 could sell for under $50K if everything was made in the U.S.—the price would be way higher.

The issue is, the U.S. and China are caught up in a trade war, and Trump doesn’t want China to get the upper hand. So he slapped big tariffs on a lot of imported goods, including ones from China. That’s bad news for Tesla since they rely on Chinese-made parts—it could really hurt their bottom line. That’s probably why they’ve been asking the government to reconsider the tariffs. And it’s not just Tesla—other manufacturers are feeling it too.

In a way, Tesla probably doesn’t want to raise prices right now because they know they’re not in a good spot to do that. Tesla’s never exactly been the most liked car company—especially with Musk’s recent political antics—so they probably realize that hiking prices wouldn’t go over well. It’s just not a good look for them, and it might even be a calculated decision to hold off. If they did raise prices a lot, there’s a real chance people would walk away from the brand.

I get that the Trump administration’s goal with the tariffs is to push for everything to be made in the US. But here’s the thing: developing countries can offer way cheaper manufacturing, which helps keep car prices down for everyone. Sure, the US could make 100% of Tesla’s parts domestically, but that would be expensive—and there are some materials or parts (like certain stamped components) that just aren’t easily available here or still need to be imported. So in the end, it doesn't really help anyone.

In general, the chances of a car company building everything in one country are basically zero. Most of them go with cheaper options—like Ford, which has a plant in Mexico. They do that to cut costs and keep car prices lower (or, if you want to be cynical, to boost profits). So what Tesla is doing kind of helps with keeping prices down, but at the same time, it’s probably not the best move overall. A lot of parts in cars are imported, and it's unlikely they'll start making all of them in-house. That would just make their cars more expensive.

What Tesla’s doing makes sense—they’re worried the import tariffs will hurt them, especially since a lot of their parts come from China or other countries. That’s why they’re pushing the US government to rethink it. They could build everything in the US, but that would make their cars way more expensive and less accessible. Plus, it would affect the whole auto industry. So honestly, props to Tesla for speaking up—not just for themselves, but in a way, for everyone else too in the community.

It all checks out. Tesla doesn’t want to raise their prices, so they’re hoping the government can find another solution. Maybe there’ll be some kind of workaround or special deal soon.