The plan, if enacted, could create new complexity for U.S. buyers. Under the terms of a new EV subsidy and production-incentive plan signed into law by U.S. President Joe Biden, the incentive available for an individual vehicle could vary depending on whether it was imported.
It could also be politically contentious.
Tesla has been widely seen as one of major beneficiaries of the Biden administration’s Inflation Reduction Act (IRA), which offers rebates of up to $7,500 on EV purchases as part of a law intended to push automakers to reduce their reliance on China.
Tesla CFO Zachary Kirkhorn told investors last month that the automaker was “very well-positioned to capture a significant share” of the incentives offered under the IRA for EVs and batteries for energy storage.
Until now, Tesla’s strategy has been to build the cars it sells in North America at its plants in Fremont, Calif., and Austin, Texas.
The California plant, Tesla’s first, produces the Model S, the Model 3 sedans and the Model X and Model Y crossovers. The Texas plant, which opened earlier this year, makes the Model Y and will produce Tesla’s upcoming Cybertruck.
Tesla is also ramping up production at a plant it opened in Berlin earlier this year. Output from the Berlin plant will reduce the need for some exports from China, one of the sources said.
Price gaps
At the same time, the price gap between Tesla cars sold in China and the U.S. has been widening, reflecting both higher U.S. prices and new discounts in China.
In China, where CMBI analysts have warned of a coming “price war,” Tesla slashed the starter prices for Model 3 and Model Y in China by as much as 9 percent last month.
On Monday, it offered an additional rebate for buyers who take delivery this month and buy insurance from one of Tesla’s partners.
Tesla sells the Model Y for the equivalent of $49,344 in China, compared to the U.S. price of $65,990. China-made cars face a 27.5 percent U.S. tariff, while light-duty trucks face a 25 percent tariff.
China, the world’s largest auto market, imposes a 15 percent tariff on imported vehicles.
In 2018, before Tesla’s Shanghai plant was operating, Musk had asked then-President Donald Trump to raise tariffs on cars imported to the U.S. from China in order to achieve “a fair outcome” where both sides had equivalent and “equally moderate” tariffs.
Tesla would not be the first U.S. automaker to ship made-in-China vehicles to the U.S. General Motors has imported the Buick Envision crossover and unsuccessfully petitioned for an exemption to 25 percent U.S. tariffs imposed by the Trump administration.
