Amid the ongoing trade war between the United States and China, Tesla reportedly made a decision that could slow the adoption of electric vehicles in a major market.
What’s happening?
As detailed by PCMag earlier this month, a report from the South China Morning Post revealed that Tesla halted the sale of the Model S and Model X in China, as the «order now» button for both vehicles became unavailable to Chinese buyers.
While Tesla has yet to state a specific reason for the decision to remove the option, the move occurred after China hiked tariffs on U.S. products to 125% in retaliation for President Donald Trump raising them to 145% on products imported into the U.S. from China.
Chinese buyers can still purchase a Tesla Model 3 or Model Y, as those vehicles are manufactured at the company’s Gigafactory in Shanghai. Thanks to the continued availability of those models and alternatives to Tesla from brands like BYD, Chinese buyers are less likely to purchase higher-priced Teslas.
«No Chinese buyers will accept paying more than twice the money to own a Model S or Model X even if they are keen,» Zhao Zhen, a sales director at Shanghai-based dealer Wan Zhuo Auto, told the Morning Post, per PCMag. «After all, the luxury models are not the main drivers of Tesla’s business here.»
Why is this important?
Making Tesla models less accessible in China can potentially hinder the adoption of environmentally friendly vehicles, which is a key step in the fight against increasing global temperatures.
Electric vehicles have become more popular in recent years thanks to their sleek looks and fuel cost reductions, but they also have the greater impact of improving air quality by cutting harmful carbon dioxide pollution, especially as electrical grids continue to add renewable energy sources. More people purchasing EVs would lead to cleaner air and fewer health issues related to air pollution.
Unfortunately for Tesla, the company is already experiencing a downturn, as PCMag noted that the company is trying to recover from a 13% sales decline through the first quarter of 2025, which Tesla said has led to a 71% drop in profits year over year.
What’s being done about this?
Per CNN, President Trump said on April 22 that the tariffs on Chinese goods will «come down substantially, but it won’t be zero.»
CNEV Post reported that Tesla sales in China were up 19% in March, thanks in large part to the revamped Model Y, so buyers there are still gravitating toward switching to EVs. Every effort to reduce air pollution will go a long way in slowing the effects of increasing global temperatures and paving the way for a greener and healthier future.
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