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Rumor Has It Chinese-Made Tesla Vehicles May Soon Land on U.S. Shores

Tesla experienced another topsy-turvy week in the headlines that included talk of a Twitter bankruptcy and a ballooning car inventory in China to rumor of Chinese exports of the popular brand.
Shanghai Gigafactory 7 photos
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Tesla managed to keep production flowing at its massive Shanghai Gigafactory during the Covid shutdowns and even completed improvements on the factory floor to increase production to 22,000 cars per week.

As a result of increased domestic competition and a cooling Chinese market the company had its greatest surplus of completed cars at the end of October. A total of 87,706 Model 3s and Model Ys were produced in Shanghai with 71,704 of those having sold, leaving a surplus of 16,002 vehicles.

While that number is low compared to typical automotive manufacturers, Tesla is not your typical automaker. Because they sell their cars through company showrooms, the company must hold and finance unsold inventory. At the end of the third quarter, Tesla's inventory ballooned to $2 billion versus $1.2 billion at the end of the previous quarter.

Both models were discounted by as much as 9% last month to boost sales and on Monday the company offered an additional rebate to buyers who take delivery this month and purchase insurance from one of its partners.

Yesterday, Reuters reported a rumor that surfaced saying the company is considering the possibility of exporting China-made vehicles to the U.S. The idea brings with it a whole host of issues before it could become a reality. First and foremost, parts made by Chinese suppliers may not meet North American regulations.

Secondly, terms of the Inflation Reduction Act signed into law this past August would disqualify buyers of Chinese-made electric vehicles from the $7,500 tax credit, ironically intended to force automakers to be less reliant on China.

Finally, China-made vehicles are hit with a 27.5% tariff when they hit U.S. shores. The sales price differential between American-made and Chinese-made Tesla's (China Model Y $49,344/U.S. Model Y $65,990) advantage would be consumed by the tariff and shipping.

After the rumor was made public Musk tweeted “False” without providing any details.

 

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