Tesla urges suppliers to make parts outside of Taiwan and China: Report

China and Taiwan produce the bulk of the world's vital electronics parts and components.

Autocar Pro News Desk By Autocar Pro News Desk calendar 07 Jun 2024 Views icon1080 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Tesla urges suppliers to make parts outside of Taiwan and China: Report

Tesla has asked suppliers to make components and parts outside of China and Taiwan by early next year, on the back of rising geo-political uncertainties, Nikkei Asia reported.

The request mentioned increasing geopolitical risks in the Greater China region ahead of the upcoming U.S. presidential election, persons in the know stated, adding that the move was aimed at establishing alternative supply sources for the non-China markets to ensure smooth supply chain operations, Nikkei Asia reported.

China and Taiwan produce the bulk of the world's vital electronics parts and components, including displays, printed circuit boards, camera lenses and semiconductors, the news publication further reported.

Persons in the know stated that American carmakers like General Motors and Ford, have asked suppliers to assess moving electronics production beyond China and Taiwan, but have not formally requested them to do so, like Tesla.

Tesla’s requests came before USA announced increasing tariffs on Chinese electric vehicles and before Taiwan’s new president Lai Ching-te took office, on May 20, Nikkei Asia noted.

Tesla did not respond to Nikkei's request for comment. Ford and GM declined to comment on specifics, though Ford said it is continually "working to build a resilient high-quality and cost-competitive supply chain."

Tesla’s search for alternative supply chains must also be seen in the context of increasing competition from Chinese EV makers, Nikkei Asia noted, alluding to data by Counterpoint Research that BYD had a 15% share of the global market for BEVs in the first quarter of 2024, whereas Tesla’s dropped from 22% to 19% in the previous year.

However, Tesla has not shifted its focus from China, as can be seen by Tesla Chief Elon Musk’s sudden visit to the country in April, in the hope of getting approval for its most advanced driver assist software FSD, in China, Nikkei Asia noted.

 

 

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