Tesla seeks tariff exemption for graphite batteries from China

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On January 7, 2019, Tesla CEO Elon Musk attended the groundbreaking ceremony of the Tesla Shanghai Gigafactory in Shanghai, China.

Ali Song | Reuters

Tesla is one of hundreds of auto industry participants asking the U.S. Trade Representative to extend tariff exemptions on parts and materials imported from China used to make or repair cars.

Supply chain issues have caused U.S. prices for new and used cars to soar .

In October, the Office of the United States Trade Representative stated that it would consider restoring tariff exclusions based on specific circumstances, especially for imported products that can only be obtained from China. A large number of industry demands may prompt the Biden administration to restore the government’s 25% tariff exemption on artificial graphite and other materials and components imported from China.

Tesla submitted three public comments on Wednesday supporting the exemption from tariffs on graphite, which is used to make anode parts for automotive lithium-ion batteries. The company said that only mainland China can provide the flake or powdered graphite it needs to manufacture batteries in the United States.

“Due to Tesla’s due diligence process on global and U.S. artificial graphite suppliers, Tesla concluded that there is currently no company in the United States that can produce artificial graphite that meets the specifications and capacity required for Tesla’s production.” Sla wrote.

Battery giant SK Innovation, through its SK Battery America subsidiary, also supports the extension of graphite tariff exemptions.

“Re-exclusion will enable SK to manufacture high-quality breakthrough electric vehicle parts for U.S. OEMs at competitive prices, while creating full-time jobs that support American families. For example, the exclusion will cost Ford’s 11.4B USD The joint venture and the US$2.54B investment benefited in Georgia,” the company wrote.

Resource World reported that hybrid electric vehicles use an average of about 22 pounds (or 10 kg) of graphite, and pure electric vehicles use an average of about 220 pounds (100 kg) of graphite.

Graphite is far from the only active ingredient. Industry players such as Toyota, Magna, and AutoZone are seeking exemptions from tariffs on electric motors used in car seats, printed circuit boards used in cameras supporting driver assistance functions, and axles used in hundreds of car models. . America, and raw materials.

Tesla CEO Elon Musk has been discussing the pressure caused by supply chain issues throughout the year.

In June, he wrote A tweet“Our biggest challenge is the supply chain, especially microcontroller chips. I have never seen anything like this. The fear of exhaustion will cause every company to over-order.” Earlier this week, he said On twitter, “Oh, man, this year is really a supply chain nightmare, it’s not over yet!”

Musk had previously contacted former President Trump on trade issues, including import tariffs on Twitter in 2018. In that exchange, Musk stated that he generally opposed import tariffs, but suggested that if there are any tariffs, they should be the same as the tariffs applied by the Chinese government to the United States imported there.

Wednesday is the deadline for all parties concerned to submit comments to the USTR. According to the website of the Office of the United States Trade Representative, Tesla’s three comments are one of 2024 comments submitted since October last year.




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