Tesla Denies Claims Chinese-Built Models Are Coming To The US

Nov. 11, 2022 6:06 PM ET by Jay Traugott Rumor / 6 Comments

But reports inside the company say otherwise.

In what could become a source of controversy, Tesla is reportedly considering a plan to export vehicles built at its Shanghai factory to the United States and Canada. The news comes from Reuters, which claims it learned the information from two sources familiar with the automaker's plans. Both the Tesla Model 3 and Model Y are built in China, but not for the US market.

The carmaker is currently studying whether or not components from Chinese suppliers are compliant with North American regulations. No specific deadline regarding a decision was provided but Tesla has a reputation for moving quickly. Normally, we would reach out to an automaker for comment but Tesla lacks a formal PR department.

Instead, there's CEO Elon Musk. He quickly reacted to this report via Twitter (where else?) with a one-word response: "False." Reuters appears to be sticking by its reporting and sources for now. The Shanghai Gigafactory, which builds vehicles for China, also exports them to Europe, Australia, and South East Asia. But why is Tesla supposedly considering North American export from China?

Two main reasons: it's cheaper to build vehicles at Shanghai and to help decrease demand from Chinese consumers. Raw materials prices are less expensive in China and there's also the cheaper yuan against the US dollar. Shanghai has an annual production capacity of 1.1 million vehicles and yes, it's now Tesla's most productive manufacturing facility globally.

2017-2023 Tesla Model 3 Driving Front Angle

2017-2023 Tesla Model 3 Driving Back View

However, there's a key obstacle Tesla would need to figure out: US government incentives. The recently-signed Inflation Reduction Act only grants a $7,500 tax credit to vehicles that are assembled in North America. This legislation is meant to encourage buyers to choose EV and encourage automakers to build their EVs locally. If Tesla's export plan proceeds, Tesla would not be eligible for the credits despite being based in the US. We'll update this story if any new information emerges.