<div id="readability-page-1">Tesla’s reported plan to stop using Chinese-made components in US-built cars aligns with a “significant strategy” in national industrial policy, with some American giants seeking to “completely de-risk” supply chains amid an increasingly tense geopolitical climate, an automotive executive said.\nCurt Hopkins, CEO of automotive investment platform MCQ Markets in Miami, said Tesla appeared to be “developing a completely dual strategy, where in the US they’re going to de-China, diversify and make sure they continue to have access to government incentives”.\n“And then in China, it [Tesla] is just fully localised, relying completely on Chinese battery and component system technology. They’re going to have two entirely different supply chain strategies for the cars.”\nHowever, as electric vehicle (EV) technology in China rapidly advances and the US loses ground, he warned of a “big danger”: the possibility that the Chinese side could dominate the entire technology stack.\nAccording to Tesla Mag, the EV giant plans to issue requirements forcing suppliers to exclude Chinese components from vehicles built in the US. A complete phase-out is anticipated within the next one or two years to mitigate the impact of tariffs and trade disputes.\nTesla’s relatively mature manufacturing capacity and “established strategy” could “probably create this divide”, Hopkins said, noting that it would have to reshore everything and scale up battery capacity.\n“They are one of the most dynamic, fast-moving firms, especially when Elon Musk is incentivised to make the change, so he could force it through,” he added.\n“Being 100 per cent free in two years is kind of big. If you are 80 per cent there in three years, it’s effectively the same thing.”\n\n\nHopkins expects Tesla to start winding down contracts with Chinese suppliers while pushing North American counterparts to cut dependence on Chinese components. Despite the challenges and risks facing the US multinational, he said the industry is closely watching whether Tesla’s strategy is successful, because “pleasing two masters” is difficult.\n“If they can make that work, then it is a sign of what can be done,” he added.\n“If you look at obviously what Apple’s doing, with their manufacturing and trying to reshore some of the capacity, it’d be very interesting to watch what they do and how they play that game and the dance there.”\nAnalysts said Tesla’s strategy has been in place for a while but has accelerated as supply chains enter the arena of geopolitical rivalry.\n“Beyond tariffs, the new US foreign entity of concern rules, the willingness to denote companies like CATL as a ‘Chinese military company’, is reshaping supply chains with a quest for economic securitisation,” said Vivek Kelkar, an independent analyst based in Mumbai.\n“Tesla will work with firms like Intel to bring critical production like chips – with ‘Tesla terafabs’, as Musk calls them – back to the US, but the critical mineral interdependence on China is harder to unshackle in the medium term.”\nKelkar said complete decoupling from Chinese tech, while a desirable end goal in the US-China rivalry, is “neither practically feasible nor truly cost-effective” given the centrality of the world’s second-largest economy in Asian manufacturing and Mexico’s role in Chinese strategy.\nYao Jin, an interim department chair in supply chain and operations management at Miami University, said costs would “definitely go up”, noting that it typically takes up to two years for a new supplier in the auto industry to pass all quality assessments.\n“When Tesla tried to take a short cut years ago, they ended up having to remachine entire shipments of parts using expensive labour in California.”\nTesla could move a single tier of its supply chain out of China, with tier two and other operations still reliant on Chinese input components, Yao added.\nHopkins said costs would be “the biggest challenge”. Despite the show of “industrial strength” from the American side, he argued the automotive supply chain would not completely split and that the US has “a lot of work to do” to catch up with China’s edge in EV technology.\n</div>

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<p>Tesla plans to phase out Chinese-made components in US-built cars, aligning with national industrial policy to de-risk supply chains amid geopolitical tensions. CEO Curt Hopkins highlights Tesla's dual strategy: de-China in the US and localize in China. Challenges include potential Chinese tech dominance and increased costs. Analysts note Tesla's strategy acceleration due to geopolitical rivalry, but complete decoupling from Chinese tech is impractical. Tesla aims to reshore production, but critical mineral dependence on China remains a hurdle.</p>

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China-made EV parts reportedly in Tesla’s crosshairs – but is a total ‘de-risk’ feasible?