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Tesla halts importing Model S, X in China as tariffs price them out of reach, out of race

Tesla has stopped taking orders to import the US-made models to China; to persuade buyers to consider the Shanghai-made Model Y and Model 3

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Tesla’s Model 3 on display at a showroom in Beijing. Photo: EPA-EFE
Daniel Renin Shanghai
Tesla has stopped accepting orders to ship Model S and Model X electric vehicles (EVs) to China, as the former bellwether of the country’s vehicle market has borne the brunt of the tit-for-tat tariff war between the US and China.

The carmaker has stopped taking orders to import the US-made vehicle models, and will instead persuade customers to consider locally assembled Model Y and Model 3 vehicles that roll out of its Gigafactory outside Shanghai, according to two sales managers.

The switch came after China increased the import tariff on all US-made products by 50 percentage points to 84 per cent earlier this week, matching the punitive duties levied by US President Donald Trump on Chinese products. The additional duties raised the price of the Model S sedan to more than 1.26 million yuan (US$172,260), while the Model X SUV is priced from 1.33 million yuan.
The higher tariffs, running against China’s brutal discount war where hundreds of EV makers are vying to sell a bulging catalogue of models, immediately price Tesla out against its rivals like BYD, Xpeng, Xiaomi and Zeekr, which offer cheaper models with matching, if not superior, specifications.
A Model X is displayed at the China International Import Expo in Shanghai on November 6, 2018. Photo: AFP
A Model X is displayed at the China International Import Expo in Shanghai on November 6, 2018. Photo: AFP

Tesla China did not respond to a query by the Post, but several Chinese customers said they were unable to place fresh orders for Model S and Model Y on Friday.

The tariff war that has ensnared the world’s two largest economies and vehicle makers is showing no signs of abating. On Friday, China raised the sweeping tariffs on all US-made products to 125 per cent, matching the Trump administration’s 145 per cent tariff.

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