Tesla orders suppliers to remove China-made parts for U.S. vehicles

Tesla Inc is requiring its suppliers to stop using China-made parts in the production of its vehicles in the United States, the Wall Street Journal reported on Friday.

According to the report, Tesla has already replaced some China-made components and plans to switch all remaining parts to non-China sources within the next year or two, citing people familiar with the matter. Tesla did not immediately respond to requests for comment outside regular business hours.

The move comes amid ongoing U.S.-China trade tensions, which have complicated pricing strategies due to fluctuating tariffs. Tesla has been increasing North American sourcing for its U.S. factories for the past two years, Reuters reported in April.

Data from the China Passenger Car Association shows that Tesla’s China-made electric vehicle sales fell 9.9% in October to 61,497 units compared with the same month last year. Output of the Model 3 and Model Y from Tesla’s Shanghai plant, including exports, dropped 32.3% from September.

Industry executives have described 2025 as a year of constant triage, navigating U.S. tariff shifts and fears of rare-earth metal and chip shortages. General Motors also instructed thousands of suppliers this week to remove China-made components from their supply chains.

Tesla and other U.S. automakers are increasingly looking to diversify sourcing, reduce reliance on China, and stabilize production costs amid trade uncertainties.

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