The tariff on brains is too high.

Import tariffs raised by the U.S. and China in August heavily affect many businesses.

One of the most recent signals from the EV industry is Tesla's request for exemption of the Model 3's computer “the brain of the vehicle” produced in China, from the 25% tariff.

According to Tesla, the high tariff threatens the company's bottom line and there is no easy way to switch to another supplier. The supplier itself was not disclosed though.

"In a redacted request posted on a government website by the USTR on Dec. 17, Tesla did not identify the supplier of the computer. But it said it had been unable to find another manufacturer “with the required specifications, at the volume requested and under the timelines necessary for Tesla’s continued growth.”

Tesla, which called the Model 3’s computer “the brain of the vehicle,” added that “choosing any other supplier would have delayed the (Model 3) program by 18 months with clean room setup, line validation, and staff training.”

Using a new supplier “substantially increases the risk of poor part quality that could lead overall vehicle quality issues that would impact the safety of our vehicles and the consumer acceptance of the final product,” Tesla added in its request for tariff relief."

Tesla is not the only one who seeks exemptions. GM, Nissan, Fiat and Uber are just a few other examples mentioned in the article.

Source: Reuters

Lead Image Credit: Kartik (@itskrtk), 2

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