December 3, 2022

Health & Fitness Journal

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Exclusive-Tesla has considered exporting electric vehicles from Shanghai to the United States and Canada

4 min read

©Health & Fitness Journal. FILE PHOTO: Tesla’s Chinese-made Model 3 vehicles are seen during a delivery event at its plant in Shanghai, China, January 7, 2020. REUTERS/Aly Song/File Photo

SHANGHAI (Health & Fitness Journal) – Tesla (NASDAQ:) has considered plans to export Chinese-made electric vehicles to the United States and Canada, two people with knowledge of the plans told Health & Fitness Journal, a move that would link its largest factory to North America would , its largest market.

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

Tesla’s assessment included considering whether parts made by Tesla’s China-based suppliers would comply with regulations in the United States and Canada, they said.

The Shanghai plant is working on an initial plan for a small-batch test-run production of vehicles in the first quarter of 2023 that would meet North American standards for possible export, one of the people said.

After Health & Fitness Journal published its article on Friday, Tesla CEO Elon Musk said “wrong” in a Twitter post without elaborating. Tesla representatives in Austin, Texas, contacted by Health & Fitness Journal did not comment or clarify Musk’s remark. A Tesla representative in China responded with a screenshot of Musk’s denials.

Health & Fitness Journal could not determine whether Musk’s comment would affect Tesla’s feasibility study into exports from China to the US and Canada, or the implementation of the plan.

The review of potential exports from Shanghai to North America had only been developing in the past two weeks, according to people speaking to Health & Fitness Journal and a memo detailing some of the steps the Shanghai plant is taking to ensure its readiness until To be tested in early 2023 that was seen by Health & Fitness Journal.

Tesla wouldn’t be the first US automaker to ship Chinese-made vehicles to the United States. General Motors (NYSE:) imported the Buick Envision SUV and unsuccessfully requested an exemption from the 25% US tariffs imposed by the Trump administration.

So far, Tesla’s strategy has been to build the cars it sells 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 vehicles a year after a modernization earlier this year, making it Tesla’s most productive manufacturing hub.

The Shanghai plant manufactures Model 3 sedans and Model Y crossovers for sale in China and for export to markets such as Europe, Australia and Southeast Asia.

Until recently, Tesla had sold or shipped every vehicle it could produce in Shanghai for export, but inventories rose at an all-time high in October, according to data from brokerage firm CMBI.

In addition, factors such as a cheaper yuan against the US dollar, lower commodity prices in China, and the rise in Tesla and new car prices in the United States have combined to mean that exports from China to the United States may be cost-competitive, people said with knowledge of said plans.

The US portion of the export plan, if implemented, could create new complexity for Tesla buyers. Under the terms of a new electric vehicle subsidy and production stimulus plan signed into law by US President Joe Biden, the incentives available for an individual vehicle could vary depending on whether it was imported, analysts said.

Tesla is widely credited as one of the main beneficiaries of the Biden administration’s Inflation Reduction Act (IRA), which is designed to offer rebates of up to $7,500 on the Purchase of electric vehicles granted.

Tesla said in a July filing with the Ontario government that it was working with Ontario officials to set up “an advanced manufacturing facility” in Canada.

Tesla is also ramping up production at a plant it opened in Berlin earlier this year. The production of this plant will reduce the need for some exports from China, one of the sources said.

At the same time, the price differential between Tesla cars sold in China and the United States has widened, reflecting both higher US prices and new discounts in China. That means Tesla vehicles could potentially be exported to North America at a competitive price.

GRAPHIC: Tesla’s Sticker Shock (

In China, where CMBI analysts have warned of an impending “price war,” Tesla slashed entry-level prices for its Model 3 and Model Y in China by as much as 9% over the past month.

On Monday, it offered an additional discount for buyers who take delivery this month and buy insurance with one of Tesla’s partners.

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

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

In 2018, before Tesla’s Shanghai plant went live, Musk had asked then-President Donald Trump to increase tariffs on cars imported into the United States from China to achieve “a fair outcome,” in which both sides had equal and “equally moderate” tariffs.

($1 = 7.2511 yuan)

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