Tesla Suspends Model S and Model X Orders in China Amid Trade Tensions
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Why Did Tesla Stopped Model S & X Orders in China?
Tesla has removed the option to order the Model S and Model X from its Chinese consumer website and WeChat Mini Programs. While the vehicles remain listed, customers can only purchase the locally produced Model 3 and Model Y.
Key Reasons Behind the Decision:
- Escalating US-China tariffs (now 125% on imported US vehicles).
- Low sales volume (under 2,000 combined Model S & X units in 2022).
- Focus on locally built, more affordable models (Model 3/Y).
Impact of US-China Tariffs on Tesla
The suspension follows a trade war escalation, with both nations imposing 125% tariffs on select imports. For Tesla, this makes American-built models like the Model S & X prohibitively expensive compared to Chinese EVs.
Price Comparison (Before vs. After Tariffs)
| Model | Base Price (USD) | Price After Tariffs (USD) |
|---|---|---|
| Tesla Model S | $72,000 | $162,000 |
| Tesla Model X | $79,990 | $179,978 |
Tesla’s Sales Strategy in China
With 657,000 global deliveries in 2022, Tesla prioritizes its Shanghai-made models for the Chinese market:
- Model 3: Accounts for ~60% of Tesla’s China sales.
- Model Y: Recently received an $11,000 price cut to boost demand.
Why Local Production Matters
Tesla’s Shanghai Gigafactory allows it to avoid tariffs and compete with brands like BYD and NIO. The Cybertruck’s $72,000 variant may also target budget-conscious buyers.
Global Sales Decline and Market Response
Tesla’s Q1 2023 sales dropped 13% globally. Analysts cite:
- Rising competition in the EV sector.
- Economic uncertainty in key markets.
- Shifting consumer preferences toward affordable models.
What’s Next for Tesla in China?
The automaker may:
- Expand Shanghai production to include more models.
- Introduce cheaper variants (like the rumored $25,000 compact car).
- Lobby for tariff exemptions on premium EVs.
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