Tesla has suspended new orders for its premium Model S and Model X vehicles on its official Chinese website and WeChat mini program, as ongoing trade tensions between the United States and China continue to intensify.
Both models are manufactured in the U.S. and imported to China. The halt in orders comes after China announced a sharp increase in tariffs on U.S. imports, raising them to 125% in response to President Donald Trump’s move to impose 145% duties on Chinese goods. These tariffs significantly raise the prices of American-made vehicles, making them less competitive against domestically produced electric vehicles (EVs).
While Tesla has not officially commented on the decision, the timing suggests the move is directly linked to the rising costs and reduced demand expected from the tariff hike.
Tesla’s premium offerings — the Model S sedan and Model X SUV — made up a small portion of its China sales. In 2024, China imported just 1,553 Model X and 311 Model S vehicles. Together, they accounted for less than 0.5% of Tesla’s total global deliveries, which surpassed 657,000 vehicles last year.
The U.S. automaker, headquartered in Austin, Texas, is relatively insulated from the impact of American tariffs, as the bulk of its domestic sales are supported by local production. In China, Tesla manufactures the more affordable Model 3 and Model Y at its Shanghai Gigafactory for local and export markets — these models form the core of its sales strategy in Asia and Europe.
However, Tesla’s dominance in China faces growing challenges. Rising competition from local EV giants like BYD, coupled with a lack of recent upgrades to the Model S and X, have led to a 25% decline in global deliveries for the vehicle category that includes these models and the Cybertruck in Q1 2025. Analysts also point to waning consumer interest amid political controversies surrounding CEO Elon Musk.
As the trade war escalates and local competitors surge ahead, Tesla may be forced to further adapt its product and pricing strategy in one of its most important markets.
