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Tesla seeks tariff waiver for graphite from China for batteries

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Tesla CEO Elon Tesla attends the Tesla Shanghai Gigafactory Gigafactory Launch Ceremony in Shanghai, China. January 7, 2019,

Aly Song | Reuters

Tesla is one of the many auto industry companies asking for the U.S. Trade Rep to extend tariff waivers on imported parts and materials from China that are used in the manufacture or repair of cars.

Soaring vehicle prices in America are due to supply chain problems. The Trump administration’s trade war against China has resulted in tariffs that have contributed to these price rises. This is especially true since some temporary exemptions from certain of those tariffs were permitted to expire late 2020 or this year.

The USTR stated in October that it will consider reintroducing tariff exclusions for certain imports from China. The biden administration could be prompted to reinstate 25 percent tariffs on artificial graphite, which is imported from China.

Tesla filed three public comments on Wednesday supporting waivers for tariffs on graphite, which is used to make the anode component of lithium-ion batteries in its cars. The company stated that only China can supply the amount of graphite needed to make its American batteries.

Tesla stated that Tesla had done due diligence on suppliers of artificial graphite globally, and concluded that none of the companies in America is capable of making artificial graphite at the specifications and production capacity required for Tesla’s production.

SK Innovation, a battery giant, supported a prolonged waiver of tariffs on graphite through its SK Battery America subsidiary.

“An extended exclusion will enable SK to produce high-quality breakthrough electric vehicle components at affordable prices for American OEMs while supporting American families with full-time employment. An $11.4B joint-venture with SK will be the beneficiary of exclusions. FordThe company also announced a $2.54B Georgian investment.”

Resource WorldReports indicate that an average hybrid electric vehicle consumes around 22 pounds (10 kilograms) or 100 kilograms of graphite while a fully-electric vehicle requires around 220 pounds (100 kg) of graphite.

Graphite does not represent the only part of the equation. Toyota, Magna AutoZoneAmong other players in the industry, they are seeking exemptions from tariffs for items such as electric motorsUsed in car seat covers printed circuit boardsUsed in cameras with driver assistance features axlesIt is used in hundreds if not thousands of vehicles sold in the United States, as well as in various raw materials.

Elon Musk is the Tesla CEO and has spoken out about supply chain stress throughout the year.

He wrote his first book in June a tweetOur biggest challenge, in particular for microcontroller chip suppliers, is the supply chain. This is unlike anything else. Companies are ordering more because they fear running out. He stated earlier this week that companies are overordering because of fear of running out. on Twitter, “Oh man, this year has been such a supply chain nightmare & it’s not over!”

Musk had previously spoken to Trump about trade issues, including tariffs. He did so via Twitter in 2018. Musk stated that he opposed import duties in general, but suggested to Trump that any such duties should be the same as those that China applies to American imports.

Tuesday was the last day for interested parties who could file comments with USTR. According to USTR’s website, Tesla’s comments are among the 2024 submitted since October.

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