The rising cost of new and used cars in the United States is partly due to problems with the supply chain. Trump administration trade war with China tariffs are a contributing factor to those price increases, especially since some of those exclusions were granted a temporary exemption in late 2020 or early this year.
Imports that can only be obtained from China will be given special consideration by the USTR when reinstituting tariff exclusions, according to statements made in October. This could lead the administration to reinstate the 25 percent tariff exemptions on artificial graphite imported from China, as well as exemptions for a variety of materials and components.
In three public comments on Wednesday, Tesla argued that graphite, which is used to make the anode component of lithium-ion batteries, should be exempt from tariffs. The company stated that only China could supply the amount of flake or powder graphite it needed to manufacture its batteries in the United States.
After conducting a thorough search for artificial graphite suppliers worldwide and in the United States, Tesla has concluded that no company in the United States is capable of producing artificial graphite to the required specifications and capacity needed for Tesla's production," Tesla stated.
Additionally, SK Innovation, through its subsidiary SK Battery America, supported an extended waiver of tariffs on graphite.
Renewing the exclusion will allow SK to produce quality breakthrough electric vehicle components at competitive prices for American OEMs while creating full-time jobs for American families. Exclusions, for example, will help Ford's $11.4 billion joint venture and Georgia's $2.54 billion investment," the company stated.
Reportedly, the average hybrid electric vehicle uses 22 pounds (or 10 kilograms) of graphite and the average fully electric vehicle uses 220 pounds of graphite.
Graphite isn't the only factor in this equation. Car seat electric motors; printed circuit boards that enable driver assistance features; axles used in hundreds of models of cars sold in the United States; and raw materials are among the items being sought by Toyota, Magna, and AutoZone.
There has been a lot of talk about supply chain issues at Tesla this year from CEO Elon Musk.
In a tweet in June, he wrote, "Our biggest challenge is supply chain, especially microcontroller chips. It's like nothing I've ever seen. Every company is overordering because they are afraid of running out. " "Oh man, this year has been such a supply chain nightmare & it's not over!" he tweeted this week.
In 2018, Tesla CEO Elon Musk took to Twitter to discuss trade issues, including import tariffs, with former President Trump. He stated that he was opposed to import duties in general, but suggested that they should be in the same range as those imposed by the Chinese government on American imports to China.
Do you think the US & China should have equal & fair rules for cars? Meaning, same import duties, ownership constraints & other factors.
— Elon Musk (@elonmusk) March 8, 2018
The deadline for interested parties to submit their opinions to USTR passed on Wednesday. According to the USTR website, Tesla's three comments were among 2024 submissions since October.
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