Elon Musk says he doesn’t want 100% tariff on China-made electric vehicles

Elon Musk says he doesn’t want 100% tariff on China-made electric vehicles

Tesla supremo Elon Musk is criticizing the import tax that the Biden administration has levied against Chinese electric vehicles, saying Tesla doesn’t need them.

The CEO voiced his opinion about the new 100 percent tariff on China-made EVs at the Viva Tech conference in Paris, according to the Telegraph, which quoted him as saying: “Neither Tesla nor I asked for these tariffs, I was surprised when they were announced.”

He reportedly added: “Things that inhibit freedom of exchange or distort the market are not good.”

Previously, the import charge on Chinese EVs was 25 percent as set by the Trump administration.

The increased electric car tariff was also accompanied by higher tariffs on semiconductors, batteries, and solar cells. Biden’s White House has reasoned that the increased rates were needed in order to “[respond] to China’s unfair trade practices.”

Sherrod Brown, one of Ohio’s two senators, also suggested a blanket ban on Chinese EVs for the protection of both the American economy and national security.

Musk’s statement distancing his company from US tariffs is curious, considering that Tesla would be one of the primary beneficiaries of the policy. Chinese car brands like BYD reportedly receive subsidies from the Chinese government, which allows Chinese EVs to be priced very competitively against models made by other companies.

However, the tech tycoon says that Tesla competes just fine without tariffs. “Tesla competes quite well in the market in China with no tariffs and no differential support, in general I’m in favor of no tariffs,” he said.

Musk might not be advocating for removing tariffs simply because he believes in the free market and is proud of his company. If China responds to the new US tariffs with tariffs of its own, then it would certainly have a negative impact on Tesla’s Chinese arm, which appears to sell just about as many cars as Tesla’s US business does according to figures from Bloomberg and China’s Passenger Car Association. According to the newswire, 131,812 vehicles were made in Tesla’s China factory in the first two months of 2024, with about half shipped locally. Having no or little to no tariffs at all in either country would probably be ideal for the American car company.

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Additionally, by publicly disavowing them, Musk is fostering a working relationship with the Chinese government. He visited China last month to meet with its Premier, Li Qiang, and then signed a deal with Baidu to get self-driving tech enabled in the Middle Kingdom. Speaking out against the tariffs certainly helps him stay on China’s good side.

The Tesla chief appeared to take a different position a few months back. In January, during the company’s quarterly earnings call, Musk said: “Frankly, I think if there are not trade barriers established, they [Chinese electric car manufacturers] will pretty much demolish most other companies in the world.”

In the same call, Musk also reiterated a desire to do business with Chinese car firms, by licensing technologies like self-driving and giving them access to charging infrastructure. ®

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