Tesla China VP Denies Shift Away From China-Made Parts In U.S.

Tao stated on Weibo that the company uses the same criteria for picking suppliers across all its global manufacturing sites, including those in the U.S., China, and Europe. She said these criteria focus on “quality, total cost, technical maturity, and long-term stability,” and that a supplier’s country of origin does not disqualify them from consideration. As Tao explained, “supplier origin does not constitute an exclusion criterion.”

Highlighting the capabilities of the Shanghai Gigafactory, Tao credited China’s advanced manufacturing for keeping the Model 3 and Model Y at highly competitive prices in the domestic market. She remarked that Shanghai’s efficient production processes contribute to what she described as the “lowest price in the world” for these models, benefiting buyers in China, Asia-Pacific, and Europe. Tao added that Tesla partners with more than 400 suppliers within China and has helped over 60 of them join its international supply network.

Prior reports, such as those cited here, claimed Tesla had started shifting away from Chinese parts for its U.S.-built vehicles, encouraging suppliers to open facilities in Mexico and Southeast Asia to minimize tariff exposure and address pandemic-related disruptions. These reports noted that new tensions around automotive chips, including restrictions on the export of certain semiconductors, increased Tesla’s focus on supply chain diversification. Additionally, Tesla reportedly stopped using China-made lithium iron phosphate (LFP) batteries in U.S. models after they lost eligibility for tax credits and became subject to higher tariffs, instead moving LFP production to Nevada.

Following Tao’s statement, Tesla shares rose 1.7% to $426.58, maintaining a three-session upward trend. As market sentiment grew more positive, several retail traders expressed optimism about further gains, with the stock up 6% in 2025 so far.