Tesla is requiring its suppliers to exclude China-made components in the manufacturing of its cars in the US, the Wall Street Journal (WSJ) reported on Friday.
The Elon Musk-led carmaker and its suppliers have replaced some China-made components and aim to switch all other components to those made outside China in the next year or two, the report said, citing people familiar with the situation.
Tesla did not immediately respond to a Reuters’ request for comment outside regular business hours. Reuters could not immediately verify the report.
Executives have struggled with fluctuating tariffs in the US-China trade dispute, complicating pricing strategies, the WSJ added.
Tesla has been increasing North American sourcing for its US factories for two years amid tariff threats, Reuters reported in April.
Earlier this month, data from the China Passenger Car Association showed Tesla’s China-made electric vehicle sales fell 9.9% to 61,497 units in October from a year earlier, reversing a 2.8% increase in September.
Output of the Model 3 and Model Y from its Shanghai plant, including exports, dropped 32.3% from September.
Tensions between the two countries have left car executives in triage mode throughout 2025. US President Donald Trump’s on-again, off-again tariffs and bouts of industry panic over potential rare earth bottlenecks and chip shortages have auto companies rethinking their reliance on China, an important source of parts and raw materials.
General Motors last week told thousands of suppliers to remove China-made components from their supply chains.
Reuters
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