According to a report from Nikkei Asia, Tesla asked several suppliers to start building components outside of China and outside of Taiwan as early as next year. The parts in question, such as displays, electronics control units and printed circuit boards, are to be used in Tesla EVs sold outside of China.
Tesla's announcement directed at parts manufacturers came in anticipation of heightened risk stemming from potential U.S. tariffs and military activities around Taiwan. These crucial components include displays, electronic control units, and printed circuit boards – all integral to Tesla's product lineup. The strategic move was announced before impending U.S. tariff hikes on imported EVs from China and before China broadcasted its military drills near Taiwan.
The auto manufacturer runs various production facilities including multiple in the US, an EV plant near Shanghai, a Gigafactory in Germany, and a newly confirmed one in Mexico.
Comparatively, other U.S.-based companies like General Motors and Ford have also considered similar shifts for electronics production; however, they have not formalized their requests as pointedly as Tesla has. Meanwhile, industry analysts suggest that moving electronic component manufacturing out of China or Taiwan could elevate vehicle costs due to higher production expenses elsewhere.
An executive from a major electronics supplier highlighted Tesla's aggressive strategy regarding this shift away from Chinese and Taiwanese markets. He noted in Nikkei Asia: "We serve several American automobile makers, and Tesla is the most aggressive in terms of trying to avoid the risks surrounding China and Taiwan." Despite these efforts, suppliers note that transitioning away from mature markets like China and Taiwan is challenging and costly given their established supply chains.
Source: Nikkei Asia
