U.S. Raising Tariff Rates on Imported EVs and Batteries From China: How It Affects Tesla

Tariffs for vehicles imported from China will see a steep raise in tariffs

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Today, as part of a broader change of tariff rates on Chinese goods, U.S. President Joe Biden announced that he’ll raise tariffs on electric vehicles imported from China, increasing the rate from 25% to 100%, effective this year.

This increase won’t just impact the import of vehicles, but also the rate for lithium-ion batteries produced in China, which will be moving from 7.5% to 25%.

Impact on Competition

The immediate impact of this new regulation is significant for Chinese manufacturers, who have been regarded as Tesla’s largest and greatest competition. Given the tariff hike, this means that new Chinese manufacturers, such as Nio, XPeng, or BYD, will either need to set up production in North America, or be subject to the increased import tariff.

Nio’s vehicles cost between $40,000 USD to $70,000 USD in China based on today’s conversion rates, and with an import tariff of 100%, an imported vehicle’s price would be doubled to $80,000 USD to $140,000 USD, not including other fees. Chinese manufacturers will have to closely weigh the advantages and disadvantages of opening up the North American market, with challenges including vehicle homologation, new tariffs, and a difficult EV market. 

Tesla and Chinese Tariffs

Elon Musk recently visited China, engaging with officials to build a foundation for what is currently the world’s largest electric vehicle market. With the potential import of Chinese EVs becoming restricted to the United States, this places Tesla in an advantageous position over its Chinese competitors who have yet to establish their brands in North America.

On the other hand, this could also impact Tesla, as they import Chinese batteries for usage in some vehicles in the United States. 

Tesla does not import Gigafactory Shanghai vehicles to the US, but has been increasing North American battery production lately, with expansions in Lathrop, California and a new facility in Sparks, Nevada.

Canadian Tariffs

In Canada, the Model 3 and Model Y are currently being imported from Gigafactory Shanghai. Given Canada’s close following of US foreign policy, this could impact either the prices of Tesla vehicles in Canada or have Tesla shipping vehicles from Fremont and Texas to the United States once again, should Canada also adopt a similar tariff policy.

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Tesla Issues Physical Recall for Some Model 3 & Model Y Vehicles Over Seat Fasteners

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Tesla has issued a new, voluntary safety recall for a small batch of Model 3 and Model Y vehicles due to an issue with improperly tightened fasteners in the first-row seats. 

The recall impacts only about 48 vehicles and will require a Tesla service visit to resolve. 

Improperly Tightened Fasteners

According to the recall notice, the issue stems from the first-row seating that may have been manufactured with improperly torqued fasteners that attach the seat back to the seat bottom. In some cases, the fasteners may be loose or missing, which could cause a rattle or the seat to detach.

This is a critical safety issue, as a seat back that is not properly anchored could detach, leaving the driver or passenger unsupported and increasing the risk of an accident.

According to Tesla’s investigation, this issue originated from a production change made for vehicles manufactured between April 3rd and May 7th of 2025. However, not all vehicles built within that date are impacted by the recall. The issue impacts 30 2026 Model Ys and 18 2025 Model 3s, across all variants, including RWD, AWD, and Performance (for the Model 3).

Thankfully, there have been no incidents related to this issue to date.

The Fix

Since this is a physical recall, Tesla will have to inspect impacted vehicles and replace and properly retorque the seat fasteners as needed, free of charge. 

Owners of vehicles who have been impacted have already been contacted under the voluntary recall, and most vehicles should have been repaired by the time this notice is formally issued.

You can also check if your VIN is impacted by a recall using Tesla’s Recall Tool.

Tesla has noted the repair should take approximately one hour of work at a Service Center, and up to two hours if a Mobile Ranger addresses the recall.

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Tesla Robotaxi Sends Out More Invites: Next Phases of Robotaxi

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Following the successful launch of Robotaxi on Sunday, June 22nd, Tesla has begun moving to the next phase of its Robotaxi rollout. They have finally begun sending out a second, larger wave of invites, expanding the early access program to more members of the Tesla community across the United States.

This has moved them past the initial 20 or so users that were offered access on Sunday. That also means Tesla is on the hunt for something crucial: more real-world data.

More Riders ASAP

The initial launch was a tightly controlled event, with access granted to a small and curated group of influencers. While this approach was ideal for generating initial buzz for the launch and collecting feedback from high-quality testers, it also presented logistical challenges.

With only a handful of authorized riders and vehicles, the demand for rides would inevitably dry up as influencers begin their journeys back home. Without a public release, that would leave Tesla’s Robotaxi fleet idle, unable to gather additional data.

To rapidly improve on Robotaxi’s FSD, Tesla needs its vehicles to be constantly navigating real-world scenarios, encountering edge cases, and logging miles. The second round of invites is needed to keep Robotaxis learning and on the road.

Austin Users Next?

This new wave of invites isn’t an open door for members of the public quite yet. By continuing to send invites to trusted community members, Tesla is executing a slow and deliberate rollout by inviting members who know and love Tesla. This allows them to scale the program gradually, increasing the number of users and the diversity of ride requests without overwhelming the relatively small initial fleet of about 10 cars.

Future phases will likely involve opening access to Tesla owners within Austin, which would open up a regular flow of rides. Once that’s done, Robotaxi will likely open up to the public.

Sign of Confidence

The expansion of the early access program is a sign that Tesla is happy and confident with the rollout so far. While Tesla can gather plenty of data around Austin from Tesla owners using FSD, they also need to continue testing features that are exclusive to the Robotaxi, such as the Robotaxi app, support, and remotely control the vehicles when needed.

We expect a full launch to potentially still be months out, but this methodical expansion will likely see more users gradually gain access to the Robotaxi network in the coming weeks.

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