Tesla CEO Elon Musk is making a significant change to the company’s supply chain. According to the latest reports, Tesla has begun instructing its suppliers not to use any components made in China in cars produced in the United States.

Tesla will not use Chinese components

This decision stands out as one of the most significant steps taken to address the risk posed to automakers by the escalating trade war between the US and China, which has affected even the most basic components, from battery cells to rare earth elements.

The Elon Musk-led company reports that some parts have already been replaced with alternatives outside of China. All remaining components are expected to be sourced entirely from outside China within the next one to two years.

This strict decision, reportedly coming directly from Musk, allows Tesla to be less affected by the tariffs imposed by the US. It also prevents potential future supply shortages. This is seen as a step in line with the long-standing efforts of other giants, such as General Motors and Ford, to reorganize their supply networks.

Tesla’s decision to take this potentially aggressive step against China is believed to be influenced by its steadily declining sales in the Chinese market. As Chinese automakers rapidly increase their market share, Chinese users are turning to domestic alternatives and moving away from Tesla. Therefore, it’s reported that Elon Musk and Tesla aren’t as concerned about losing the Chinese market as they once were.

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