Musk didn't expect that Trump would turn against him after taking office, exempting other electronic products but not lithium batteries.
Musk never imagined that he went to great lengths to help Trump get elected president, only for the latter to repay him by burning the bridges behind him.
On April 11th, Trump granted tariff exemptions for certain Chinese electronic products, including computers, mobile phones, semiconductors, and electronic components, but notably excluded lithium-ion batteries. This move will have a devastating impact on Musk's business.
Firstly, Tesla is an electric vehicle company, and the battery is undoubtedly the most critical component of any electric vehicle. China accounts for more than 80% of global lithium battery shipments, meaning Tesla has a high degree of reliance on China in terms of lithium batteries.
Secondly, while Trump granted tariff exemptions for other electronic products, he did not include lithium batteries. This made lithium batteries one of the products with the highest tariffs from the US to China (with a tariff rate of 82.4%). This undoubtedly dealt a significant blow to Tesla's core supply chain. Given that the battery pack accounts for 30%-40% of the total cost of electric vehicles, Trump's tariff measures would result in an increase of thousands of dollars in the cost per Tesla vehicle. For a company that emphasizes cost control, this price is unaffordable.
As the tariff war between China and the US intensifies, it can be foreseen that one side will inevitably be at a disadvantage. However, what is unexpected is that Tesla may become the biggest loser in this conflict. Looking back, Musk played a crucial role in helping Trump regain the presidency last year, making this outcome all the more regrettable.
Source: https://www.toutiao.com/article/1829376990521347/
Disclaimer: The article solely represents the author's personal views.