Tariffs imposed by the Trump administration during trade frictions with China are reportedly pushing up car prices, especially after some temporary exemptions expire at the end of 2020 or early this year. As a result, Tesla is one of hundreds of auto industry participants who have asked the Office of the United States Trade Representative ((USTR)) to extend tariff exemptions for parts and materials imported from China for use in the manufacture or maintenance of cars.
In October, the Office of the United States Trade Representative said it would consider restoring tariff exemptions on a case-by-case basis, especially for imports that can only be obtained from China. A large number of industry demands could prompt the Biden administration to restore a 25% tariff exemption on imports of artificial graphite and other materials and components from China.
Tesla submitted three public comments on Wednesday in support of the tariff exemption for graphite. Graphite is used to make anode assemblies for lithium-ion batteries used in Tesla cars. Tesla said that only mainland China can provide the amount of flake or powdered graphite it needs to produce batteries in the United States.
Tesla wrote: "after conducting due diligence on artificial graphite suppliers around the world and in the United States, Tesla concluded that at present, no company in the United States can produce artificial graphite that meets the specifications and capacity required by Tesla."
In addition, battery company SK Innovation also supported the extension of tariff relief on graphite through its US subsidiary SK Battery America.
If tariff exemptions are restored, SK will be able to produce high-quality breakthrough electric vehicle parts for US OEM at competitive prices, while creating full-time jobs that support American families. This will benefit the $11.4 billion joint venture with Ford and the $2.54 billion investment in Georgia. " The company wrote.
It is understood that each hybrid vehicle uses about 22 pounds (or 10 kilograms) of graphite on average, while all-electric vehicles use about 220 pounds (100 kilograms) of graphite on average.
Of course, graphite is far from the only ingredient at work. Industry giants such as Toyota, Magna (Magna) and AutoZone are seeking to exempt products such as motors for car seats, printed circuit boards for driver-assisted cameras, axles for hundreds of models sold in the US, and raw materials.
Musk, chief executive of Tesla, has been talking about the pressure of supply chain problems all year. "our biggest challenge is the supply chain, especially microcontroller chips," he wrote on Twitter in June. Every company is oversubscribing for fear of running out of inventory. " Earlier this week, he said on Twitter, "Oh, my God, this year is a supply chain nightmare, and it's not over!"
