Tesla is reportedly instructing its suppliers to remove China-sourced parts from vehicles built in the United States, according to a Friday report from the Wall Street Journal. The company, led by Elon Musk, has already begun replacing several components and is aiming to phase out the remaining China-made parts over the next one to two years, the report said, citing sources familiar with the matter.
The automaker did not respond to Reuters’ request for comment outside normal business hours, and Reuters was unable to independently confirm the Journal’s reporting.
The shift comes as U.S.–China trade tensions continue creating uncertainty for manufacturers. Executives across the industry have had to manage unpredictable tariff changes, which have complicated cost planning and pricing strategies, according to the Journal.
Tesla has been moving more of its supply chain to North America for roughly two years, Reuters noted in April, as the threat of additional tariffs loomed. Ongoing geopolitical friction has placed automakers in a constant state of adjustment throughout 2025. President Donald Trump’s intermittent tariff announcements—combined with concerns over rare-earth materials and semiconductor supplies—have pushed many carmakers to reassess their dependence on China for essential inputs.
General Motors also recently asked thousands of its suppliers to eliminate China-made parts from their production lines.
Meanwhile, Tesla’s performance in China has shown signs of strain. Data from the China Passenger Car Association revealed that sales of Tesla’s China-manufactured electric vehicles dropped 9.9% year-over-year in October to 61,497 units, reversing a modest increase recorded in September. Production of the Model 3 and Model Y at the company’s Shanghai facility, including units intended for export, also declined 32.3% from the previous month.
