In U-Turn, Elon Musk Says US Tariffs on Chinese EVs ‘Not Good’

Less than four months after vouching for protectionist measures against his Chinese rivals, Tesla chief Elon Musk has said he is opposed to Washington’s newly announced tariffs on electric vehicles imported from China.

“Things that inhibit freedom of exchange or distort the market are not good,” Musk said at the Viva Technology conference in Paris on Thursday.

“Neither Tesla nor I asked for these tariffs, in fact I was surprised when they were announced,” Musk said.

Also on AF: Tesla Wants Suppliers to Shift Outside China, Taiwan – Report

The tariffs, launched by US President Joe Biden, are set to take effect from August 1. They will target an array of Chinese imports, including EVs, chips, critical minerals, solar cells and even medical supplies.

The White House says the new measures will affect $18 billion worth of Chinese goods.

“I’m in favour of no tariffs,” Musk said at the VivaTech conference, speaking via video link.

“Tesla competes quite well in the market in China with no tariffs and no deferential support,” he added.

Musk’s comments were an about-face from his warning in January that Chinese EV companies will “demolish most other car companies in the world” without trade barriers.

“Our observation is generally that the Chinese car companies are the most competitive car companies in the world,” he had said at a post-earnings.

Tesla’s mixed-moves on China

Musk’s comments at the time came on the back of a tumultuous year for the carmaker in China. Tesla faced tough competition from China’s BYD, temporarily losing its crown as the world’s biggest EV-seller to the company.

As of April, Tesla’s China sales were down 18% year-on year. Meanwhile, BYD’s sales were up nearly 49% year-on-year.

Musk’s statements on Thursday follow an array of mixed moves from the Tesla chief with respect to China.

Last month, he made a surprise trip to Beijing to woo top Chinese leaders in favour of rolling out Tesla’s Full Self-Driving (FSD) software in the country. FSD data from China — the world’s biggest EV market — would be critical to Tesla’s ambitions of creating higher level autonomous cars.

Musk is also reportedly mulling setting up a data centre in China, in order to meet Beijing’s regulations on transfers of sensitive data.

At the same time, Tesla has also been “aggressively” pushing its suppliers to shift production of components and parts outside China over concerns of geopolitical tensions, according to a Nikkei Asia report this week.

• Reuters, with additional editing by Vishakha Saxena

Also read:

Apple, Tesla See China Sales Plunge as Local Rivals Catch Up

Musk Offered to Launch Robotaxis in China for FSD Approval

China Business Capital Okays Foreign Data Exports Sought By Tesla

Tesla Signs Deal With Baidu on China Roads Mapping Data

Foreign Carmakers Seek Chinese EV Partners on AI, Smart Tech