Tesla suspends Model S and X orders in China due to trade war
By ForGeeks Rising duties between the US and China have forced Tesla to stop supplying premium models – a move that could change the balance of power in the world’s largest electric car market.
Tesla is no longer taking orders for the Model S and Model X in China – the relevant “Order” button has disappeared from the company’s Chinese website. The decision was made against the backdrop of a sharp increase in import duties imposed by Beijing in response to similar measures by the US. This has already raised concerns about Tesla’s future in China, the brand’s most important market.
The decision was made amid a sharp increase in import duties imposed by Beijing in response to similar measures by the US.
American Tesla has become too expensive for China
Duties on cars from the US in China have risen to 125%, more than doubling the price of models such as the Model S and Model X. The changes make deliveries unprofitable, effectively driving Tesla’s flagship electric cars out of the Chinese market.
These changes make it unprofitable to deliver, effectively driving Tesla’s flagship electric cars out of the Chinese market.
There has been no official statement from the company yet, but the disappearance of the ability to place an order speaks for itself: Tesla is reassessing its strategy in China amidst escalating economic conflict.
The loss is limited but painful
Although the Model S and Model X are not best-sellers in the PRC – just over 2,000 units sold in 2024 – they are generating the biggest profits. The bulk of sales in China come from the locally assembled Model 3 and Model Y, which have lower margins.
Surplus Model S and X are still available in select showrooms in major cities, but no new orders are being taken and inventory is rapidly dwindling.
Tesla’s privileged position in China is under threat
Tesla until recently enjoyed exclusive status in the Chinese market. The Gigafactory Shanghai plant became the first overseas auto company not to require a local partner, and Ilon Musk has built close ties with high-ranking officials, including Prime Minister Li Keqiang.
But with the trade war escalating and nationalist sentiment even such relationships are coming under pressure. Analysts say that Tesla’s position in China is weakening -especially amid the strong growth of local brands like BYD. According to the China Passenger Car Association, Tesla’s sales in China fell by 11.5% in March, while BYD increased volumes by 23%.
Possible risks to Tesla’s entire global chain
The halt in Model S and X sales is just the tip of the iceberg. Chinese batteries play a key role in Tesla’s U.S. products, including Powerwall and Megapack. If China imposes duties on these components, Tesla risks serious logistical disruptions and rising costs.
Tesla’s key role in the U.S. production of Tesla products, including Powerwall and Megapack.
And if the situation continues to deteriorate, even operations at the Shanghai plant could be jeopardized. For now, Model 3 and Y production continues, but the balance Tesla has been seeking in China is becoming increasingly fragile.
