- Tesla warns tariffs will raise vehicle costs and reduce the competitiveness of US exports.
- The unsigned letter highlights internal fear within the brand over potential retaliation..
- The EV maker has been reshaping its global supply chain to adapt to new challenges.
While Elon Musk has proven to be a valuable asset to President Donald Trump in more ways than one, even Tesla sees the writing on the wall when it comes to the ongoing trade war. The electric vehicle manufacturer sent a letter to U.S. Trade Representative Jamieson Greer, warning about the impact retaliatory tariffs could have on production costs.
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In the letter, dated March 11, Tesla called on Greer to “further evaluate domestic supply chain limitations” in an effort to shield US manufacturers from the fallout of the trade conflict. Interestingly, the letter itself was unsigned, with an unnamed source familiar with the letter’s delivery explaining to The Financial Times that this was likely due to “nobody at the company wanting to risk getting fired over sending it.”
In the letter, dated March 11, Tesla urged Greer to “further evaluate domestic supply chain limitations” as a way to shield U.S. manufacturers from the fallout of the ongoing trade conflict. Interestingly, the letter was unsigned, with an anonymous source close to the matter telling the Financial Times that this was likely due to “nobody at the company wanting to risk getting fired over sending it.”
As the source dryly noted, “It’s a polite way of saying that the bipolar tariff regime is screwing over Tesla.”
The Growing Tariff Impact
Tesla is making it clear that the trade war is creating real hurdles. “As a U.S. manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices,” the letter states. “Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the US.”
Tariffs are not just impacting Tesla locally in the United States. Many of the EVs it builds in the US are exported to Canada, and it’s already been forced to raise prices in the Great White North in response to the tariffs.
Tesla added that tariffs will impact the cost of making vehicles in the US and make them less competitive after being exported internationally. The letter also urged Trump’s administration not to make it more expensive to import materials like lithium and cobalt into the United States, particularly given they are in short supply in the US.
Tesla’s Effort to Adapt
Tesla has been making efforts to shift its global supply chain in recent months, working to source more materials and components domestically. But given the limited availability of certain critical resources in the US, it’s unclear how much of an impact those efforts will have.
So, will pressure from companies like Tesla push Trump to reconsider his pro-tariff stance? It seems unlikely, especially since he’s been vocal about his support for tariffs since his return to the Oval Office. Only time will tell, but one thing’s for sure: the trade war isn’t making life any easier for American manufacturers.
