Tesla (TSLA, Financials) stopped accepting new orders in China for its imported Model S and Model X, stepping back from a small but symbolic part of its business just as trade tensions between the U.S. and China flare up again, according to Reuters.
The company quietly removed the two models from its Chinese website and WeChat mini program this week. While Tesla has not provided an official explanation, the move coincides with China's decision to raise tariffs on U.S.-made vehicles to 125%, in response to President Donald Trump's latest round of tariff hikes on Chinese goods, now set at 145%.
The timing is hard to ignore. Both the Model S and Model X are built in the United States and shipped to China. The sharply higher import duties have likely pushed their sticker prices beyond what most local buyers are willing to pay—especially with a growing range of domestic electric vehicle options.
Tesla's main business in China remains intact. The Model 3 and Model Y—produced at its massive Shanghai Gigafactory—continue to be available. These locally built models account for the overwhelming majority of Tesla's sales in China and are also shipped to Europe and other regions.
Official data from the China Auto Dealers Association shows that only 1,553 Model X and 311 Model S units were imported into China in 2024. Together, they made up less than 0.5% of Tesla's total global deliveries, which topped 657,000 vehicles last year.
That's not the only challenge. Tesla is also feeling the heat from local rivals like BYD (BYDDF, Financials), which are rolling out affordable, feature-rich EVs at a blistering pace. On top of that, some customers have soured on the brand over a perceived lack of upgrades to its older models—and growing political polarization tied to CEO Elon Musk.
Tesla has yet to release a public statement about the decision to pause orders.
