Tesla’s Cybercab and Semi sourcing disrupted by Trump’s tariffs, report says

A new report claims that President Trump’s tariffs have disrupted Tesla’s plan to source parts for the upcoming Cybercab and Tesla Semi production in China.

The trade war started by President Trump and his constantly changing tariffs has thrown a wrench in the plans of most supply chain managers worldwide.

Tesla is no exception.

For most of its manufacturing programs in the US, the American automaker imports a significant number of parts from China, Mexico, Canada, and Europe.

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This includes its upcoming vehicles: Cybercab and Tesla Semi.

Tesla aims to start production of the vehicles at Gigafactory Texas and a new factory in Nevada later this year and ramp up to volume production in 2026.

Reuters reports that Tesla has suspended plans to source certain parts for the upcoming Cybercab and Tesla Semi from China:

Tesla’s plans to ship components from China for Cybercab and Semi electric trucks in the United States were suspended after President Donald Trump raised tariffs on Chinese goods amid a trade war, said a person with direct knowledge.

According to the report, Tesla was ready to move ahead with the plan when Trump first increased the tariffs on China to 34%, but the automaker is suspending the specific sourcing plans after the most recent increases:

Tesla was ready to absorb the additional costs when Trump imposed the 34% tariff on Chinese goods but could not do so when the tariff went beyond that, leaving shipping plans suspended, said the person, who declined to be named as the matter is private.

Trump raised the tariffs on China to 145% last week, with some expectations announced on Friday — even though Trump later claimed there were no exceptions.

In response to the tariffs the US is imposing on China, the Chinese government reciprocated with its own tariffs on US goods, which resulted in Tesla stopping taking new orders for Model S and Model X vehicles in the country.

Electrek’s Take

I would take the report with a grain of salt since it is based on a single source, but it certainly makes sense.

The phrase “Trump’s tariffs have disrupted” could be followed by the name of virtually every major manufacturing company globally, and Tesla is no exception.

Due to Tesla’s vertical integration, Tesla shareholders have been claiming that the tariffs would be positive for Tesla, or at least not as bad as they would be for other automakers.

Tesla indeed has impressive vertical integration for the auto industry, but that’s in relative terms. Effectively, Tesla still uses a significant number of parts from other countries, especially Mexico, but also from China.

Mexico would be the most problematic for Tesla, as roughly 25% of the parts of all its vehicle programs built in the US originate from there.

The tariffs on auto parts from Canada and Mexico are currently paused for everything in the USMCA agreement, but Trump signaled that this is only temporary.

As for the tariffs on China, they primarily affect Tesla’s energy business, which relies on cheap Chinese battery cells, but Tesla also imports some Chinese parts for its cars and 145% tariffs will change that.

Tesla, like many other companies, has to start looking for alternatives.

Many of the problems come not only from the excessively high tariffs Trump is imposing on countries, but also from the fact that he keeps changing his mind and making exceptions, making it hard for companies to plan.

In this case, Tesla might have suspended plans with Chinese suppliers only to wait and see if Trump will back off the Chinese tariffs, if Musk can lobby for an exception with the President, whom he helped elect with $250 million in political donations, to shop for suppliers from other countries, or maybe, just maybe, do what Trumps claims his tariffs will do and manufacture those parts in the US.

For some reason, I have doubts about it being the last one, but you never know.