Tesla Inc is expected to start shipping Model Ys from its gigafactory in Berlin to Canada, following the announcement of retaliatory tariffs on imports from the US. This move is seen as a strategic decision to avoid high tariffs on importing from the US and Shanghai.
Background
- Tesla sold 48,000 cars in Canada in 2024, with 11,000 units coming from China.
- However, after Canada increased tariffs on China-made EVs to 100%, the company stopped shipping cars from there.
- With Canada’s retaliatory tariffs on US imports, Tesla will now stop importing from the US and instead ship Model Ys from its Berlin factory.
Impact of Trade Tensions
The escalating trade tensions between the US, Canada, and China have significant implications for Tesla’s operations. While the trade war with Mexico, Canada, and China is unlikely to impact Tesla’s battery supply, a potential trade war with Japan could affect the company’s Model S and X production in the US. This is because these models use cells imported from Japan.
Canada’s Retaliatory Tariffs
- Canada has announced 25% tariffs on a range of imports from the US, effective February 4.
- The tariffs will remain in place until the US eliminates its tariffs against Canada.
- Additional tariffs on $125 billion worth of goods are likely to be imposed in 21 days, which may include electric vehicles manufactured in America.
Implications for Tesla
By importing Model Ys from Berlin, Tesla can bypass the high tariffs imposed by Canada on US imports. This strategic move is expected to minimize the impact of trade tensions on the company’s operations and ensure a stable supply of vehicles to the Canadian market. As the trade tensions continue to escalate, it remains to be seen how Tesla will navigate these challenges and maintain its competitive edge in the electric vehicle market.