Trade war: Tesla is worried about new Chinese tariffs

03/10/2018

 

According to the American company, the combination of rates and transportation costs is damaging sales

 

Although the world’s largest electric car market, the Chinese one, does not seem to stop, the electric car company Tesla said it was worried about the new tariffs imposed by China for American cars.

Tesla has warned of major problems with the sale of cars in China due to new tariffs that would force it to accelerate investments in its Shanghai plant.

 

Tesla announced record quarterly car production on Tuesday

 

The combination of tariffs – China has increased tariffs on US car imports to 40% – and transportation costs are damaging Tesla’s sales in the world’s largest electric car market.

Tesla said: “Taking ocean transport costs and import tariffs into account, Tesla is now operating at a 55 per cent to 60 per cent cost disadvantage compared to the exact same car locally produced in China”.

 

Tesla exceeded Wall Street forecasts by delivering 83,500 cars

 

However, Tesla’s production capacity is going well. The Californian electric car manufacturer claimed to have produced 80,142 vehicles in the third quarter, with a jump of 50% compared to the previous quarter.

On the other hand, the accounts of the American automaker are not going very well. Musk wrote in an email to employees that the company is “very close to achieving profitability” but the goal, repeatedly promised, has not yet been reached.

 

According to Gene Munster, head of research at brokerage Loup Ventures, Tesla needs US$1.5 billion to sustain operations

 

Amid the worsening of US President Donald Trump’s trade war with China, Tesla said it was speeding up construction of its Shanghai Gigafactory but provided no details.

And about this, Musk in July landed a deal with Chinese authorities to build a new combined auto and battery plant in Shanghai, its first outside the United States and a key to doubling its global capacity.

 

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