Tesla Halts Model S and X Orders in China After Heavy Tariffs Hit U.S. Imports

Tesla is no longer accepting new orders for its Model S sedan and Model X SUV in China after the country responded to recent U.S. tariffs by slapping a 125% import tax on American-made vehicles.

Both the Model S and X are built in Tesla’s Fremont, California factory and shipped overseas. But with the steep new import duties in effect, continuing sales of these models in China is no longer viable. Chinese customers now can only purchase from limited inventory already in Tesla showrooms across the country.

Tesla has long shifted its strategy in China to rely on its Shanghai Gigafactory, which locally produces the popular Model 3 and Model Y. These mass-market models make up the vast majority of Tesla’s Chinese sales and aren’t affected by the new tariffs.

Luxury and specialty vehicles like the S and X typically don’t justify local production due to their limited demand, which is why they remain U.S.-made exports. But with tariffs making them even more expensive, Tesla appears ready to phase them out from its China offering for now.

This tariff face-off stems from escalating trade tensions after the U.S. introduced new tariffs under the Trump administration. While the administration showed signs of pulling back on some of its global trade measures, it’s standing firm on its China stance, and Beijing has answered accordingly.