By Axios | Created at 2024-09-27 20:31:25 | Updated at 2024-09-30 07:18:58
2 days ago
Elon Musk's relationship with the Biden administration got even more complicated this week, when the White House proposed a ban on Chinese software and hardware in advanced vehicles.
The big picture: This rule could benefit Tesla Motors in the short-term by keeping Chinese EVs out of the U.S. — but also could boomerang if China responds in kind.
Catch up quick: The Commerce Department rule is rooted in national security fears of a future in which Beijing could gather information on, or even take control of, vehicles operating on U.S. roads.
- Biden already rocked the Chinese EV industry with a 100% tariff earlier this year.
Zoom in: Tesla doesn't break out vehicles sales by country, but China is thought to be its second-largest market, and the one with the greatest growth opportunity for EVs
- Most, if not all, of those vehicles were manufactured in China, but using software and hardware designed in the U.S.
What they're saying: The Chinese government has criticized the proposed ban, calling it "protectionist," but hasn't specified its possible response.
- Musk hasn't publicly commented.
The bottom line: Other U.S. automakers also sell into China, but Tesla could get harder hit were Beijing to adopt a similar rule — because its cars are all connected and have autonomous driving capabilities.
- A bigger issue for some U.S. automakers, including General Motors, would be needing to find alternate suppliers for some parts they currently source from China.
