Electric vehicle (EV) giant Tesla (TSLA) clarified that it values its Chinese suppliers and denied claims of country-specific exclusions. Grace Tao, Tesla’s VP of government affairs and public relations in China, made this clear on her Weibo account today.
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Tao stated, “Whether in the United States, China, or Europe, Tesla applies the same strict and objective standards for selecting suppliers across its global production facilities.” This statement responds to a Wall Street Journal report alleging Tesla asked its suppliers to exclude China-made parts from the manufacturing of its U.S. autos.
Tesla Shanghai Achieves Lowest Global Prices
Tao emphasized that Tesla Shanghai’s domestically produced vehicles have the lowest prices worldwide, thanks to the economic pricing of Chinese goods. She added that a supplier’s country or location is not a factor in Tesla’s exclusion decisions.
Model 3 and Model Y, in particular, benefit from more than 400 local suppliers, with over 60 supplying Tesla globally. Tesla claims that over 95% of the parts in its China-made Model 3 and the updated Model Y come from local suppliers. The Model 3 sells for 235,500 yuan (about $33,250) in China, compared with $36,990 in the U.S.
Meanwhile, rival General Motors (GM) has reportedly instructed thousands of its suppliers to remove Chinese-made parts from their supply chains, showing automakers’ growing frustration with geopolitical disruptions.
Tesla Struggles with Global Sales Decline
While clarifying its supplier stance, Tesla continues to face declines in global EV sales. European sales fell 48.5% year-over-year in October, according to the European Automobile Manufacturers’ Association, with a 30% drop year-to-date. Globally, the EV sector grew 26% during the same period.
Tesla is expected to report a high-single-digit annual sales decline, worse than the 1% drop in 2024. CEO Elon Musk’s controversial political comments earlier this year have negatively impacted Tesla’s brand in Europe. The company also grapples with an aging model lineup, pricing pressures, and stiff competition in its key markets of the U.S., China, and Europe.
Is TSLA Stock a Buy, Hold, or Sell?
Analysts remain cautious on Tesla’s long-term outlook. On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 10 Holds, and 10 Sell ratings. The average Tesla price target of $383.04 implies 8.7% downside potential from current levels. Year-to-date, TSLA shares have gained nearly 4%.
