Tesla requests suppliers shift production outside China and Taiwan amid rising geopolitical tensions

Tesla is reportedly seeking to diversify its supply chain in Asia by asking its suppliers to relocate production of critical components outside of China and Taiwan by next year. This request is driven by escalating geopolitical uncertainties in the region.

According to a report by Nikkei Asia, citing six supply chain executives familiar with the request, Tesla is targeting the production of key components such as printed circuit boards, displays, and electronic control units with their request.

According to a source from a Taiwan-based supplier, Tesla has explicitly asked that these components be produced “out of China and out of Taiwan” (OOC and OOT), with such changes to be implemented in time for next year’s production.

The report suggests Tesla aims to establish alternative supply sources to avoid potential disruptions for markets outside of China.

Tesla is reportedly also engaging with suppliers across Asia, including Japan and South Korea. An executive from a Japanese electronics manufacturer confirmed discussions with Tesla regarding the relocation of production. Another supplier executive mentioned their company’s plans to ramp up capacity in Thailand due to Tesla’s request.

Tesla’s decision to diversify its supply chain comes as geopolitical tensions, particularly between the US and China, have been steadily rising in recent months ahead of the upcoming US presidential election.

Other American automakers, such as General Motors and Ford, have also explored similar strategies but have not yet formalized their requests as aggressively as Tesla, which according to executives is the most proactive in seeking to avoid risks associated with China and Taiwan.

Tesla’s requests came before the most recent development heightening tensions between the US and China, including the US imposing higher tariffs on Chinese-made EVs.

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