American electric vehicle maker Tesla Inc has scrapped plans to buy land to expand its Shanghai plant and turn it into a global export hub amid uncertainty over tensions between the U.S. and China, Reuters reported, citing sources familiar with the situation. .
With 25% tariffs on imported Chinese electric vehicles imposed on top of existing taxes under former President Donald Trump, Tesla now intends to cap China's share of its global production, according to two out of four people.
According to agency sources, the American company had previously planned to expand its Shanghai plant in order to export the Model 3 cars produced there to other countries, including the United States. Shanghai Model 3s are currently shipping to Europe. The plant produces Model 3 and Model Y cars. The plant's capacity allows it to produce up to 500 thousand cars per year.
In addition, Bloomberg, citing data from the China Passenger Car Association, reported a drop in Tesla sales in China. In April of this year, the company sold 25,845 locally produced vehicles against 35,478 vehicles in March. At the same time, 14,174 vehicles were exported to Europe. The association did not release data on exports of Shanghai-made electric vehicles in March or February. Tesla began exporting its Chinese vehicles late last year.
Recall that recently Tesla was accused in China of spying on military targets using the built-in autopilot cameras.