Musk attacks | Tesla’s supply chain is said to be moving away from both sides of the Taiwan Strait due to rising geopolitical risks

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Shanghai Energy Storage Super Factory breaks ground Support EJ Tech

Tesla, the US electric car company, has reportedly asked some suppliers to produce parts for its models sold outside China outside of mainland China and Taiwan as early as next year due to concerns about rising geopolitical risks.

The Nikkei Shimbun quoted six senior executives in Tesla’s supply chain as saying that suppliers of components such as printed circuit boards, displays and electronic control unit systems for Tesla models outside of China have recently received notifications from Tesla, citing increased geopolitical risks in Greater China ahead of the U.S. presidential election and the desire to avoid supply chain disruptions.

Tesla reportedly made the above request to suppliers before the United States announced this month that it would impose import tariffs on Chinese electric vehicles and before the new leader of Taiwan took office. Suppliers from Taiwan are involved, and Tesla is also discussing the issue with other Asian suppliers such as Japan and South Korea. However, a supply chain executive bluntly stated that it is very difficult and costly to move the supply chain “OOC” (out of China) or “OOT” (out of Taiwan) because the supply chains in these two places are the most mature.

The report also quoted sources as saying that General Motors, Ford and other American automakers have urged suppliers to study how to move electronic product production lines out of China and Taiwan, but have not yet issued a formal notice on this.

Shanghai Energy Storage Super Factory breaks ground

According to domestic media reports, Tesla’s energy storage super factory in Lingang, Shanghai, held a groundbreaking ceremony yesterday. It is expected to be put into production in the first quarter of 2025. By then, Tesla’s commercial energy storage system Megapack production will reach 10,000 units, with an energy storage scale of nearly 40 GWh. Tesla Senior Vice President Zhu Xiaotong said that the factory is Tesla’s first energy storage super factory outside the United States, and it is also another large-scale investment project in China after the Shanghai Super Factory in the past ten years since entering China.