Tesla requires suppliers to avoid China-made parts for US cars, WSJ reports

Tesla is now requiring its suppliers to exclude China-made components in the manufacturing of its cars in the United States, the Wall Street Journal reported on Friday.

The Elon Musk-led automaker and its suppliers have already replaced some China-made components and aim to switch all other components to those made outside of China in the next year or two, the report said, citing people familiar with the situation.

Tesla did not immediately respond to a Reuters' request for comment outside regular business hours. Reuters could not immediately verify the report.

Executives have struggled with fluctuating tariffs in the US-China trade dispute, complicating pricing strategies, the Journal added.

Tesla has been increasing North American sourcing for its US factories for two years amid tariff threats, Reuters reported in April.

Earlier this month, data from the China Passenger Car Association showed that Tesla's China-made electric vehicle sales fell 9.9 per cent to 61,497 units in October from a year earlier, reversing a 2.8 per cent increase in September.

Output of the Model 3 and Model Y from its Shanghai plant, including exports, dropped 32.3 per cent from September.

Tensions between the two countries have left car executives in triage mode throughout 2025. US President Donald Trump’s on-again, off-again tariffs and bouts of industry panic over potential rare-earth bottlenecks and chip shortages have auto companies rethinking their reliance on China, an important source of parts and raw materials.

General Motors this week told thousands of suppliers to remove China-made components from their supply chains.