Tesla Mulls Exporting China-Made EVs To The U.S.

Tesla is considering exporting made-in-China electric cars to the United States, two people with knowledge of the planning told Zhang Yan and Brenda Goh of Reuters, a reversal that would reflect the automaker's deepening cost advantage at its Shanghai plant and slower demand from Chinese consumers.

Photo Insert: The Shanghai Gigafactory makes Model 3 sedans and Model Y crossovers to sell in China and for export to markets including Europe, Australia, and South East Asia.

The company has been studying whether parts made by its China-based suppliers are compliant with local regulations in North America, and if they are, could ship China-made Model Y and Model 3 cars for sale there as soon as next year, said the people, who declined to be named as the matter is private.

That could also open a channel for exports to Canada, one of the people said. Tesla did not immediately respond to a request for comment, but Musk in a Twitter post after the story's release replied "False" without elaborating.

Tesla's Shanghai Gigafactory has the capacity to produce 1.1 million electric vehicles per year after an upgrade earlier this year, making it Tesla's most productive manufacturing hub.

The Shanghai plant makes Model 3 sedans and Model Y crossovers to sell in China and for export to markets including Europe, Australia, and South East Asia.

Until recently, Tesla had been selling or shipping for export every vehicle it could produce in Shanghai, but inventory levels rose by their largest margin ever in October, according to data from brokerage CMBI.

In addition, factors including a cheaper yuan against the US dollar, lower raw material prices in China, and the rise in Tesla and new-car prices in the US have combined to make exports from China to the US potentially cost competitive, the people with knowledge of the plans said.

The plan, if enacted, could create new complexity for US buyers. Under the terms of a new electric-vehicle subsidy and production-incentive plan signed into law by US President Joe Biden, the incentive available for an individual vehicle could vary depending on whether it was imported.

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