Tesla (TSLA, Financial) is currently facing challenges due to U.S. tariff policies, impacting its supply chain. CEO Elon Musk highlighted that tariffs could affect the cost of parts sourced from countries like China, Mexico, and Canada, potentially increasing vehicle prices and affecting consumer demand. Suppliers are concerned about a potential decline in demand, which could lead to fewer orders.
Some suppliers are wary of Tesla passing on these costs to them, with companies waiting for clearer policies before adjusting pricing strategies. A supplier mentioned that any attempt to transfer these additional costs to them would be unacceptable, as they have profit margins to maintain. Automakers might raise product prices or require suppliers to store parts in specific locations to avoid high tariffs.
To mitigate trade risks, Tesla has encouraged Chinese suppliers to establish factories in Mexico and recently in Thailand. Meanwhile, supplier Top Victory Electronics (003019) announced efforts to increase production in Thailand and establish a production line in the U.S. to reduce tariff impacts. Additionally, some suppliers are diversifying into new business areas, like humanoid robots, to offset potential risks from tariff policies.
