Tesla prompts tariff exemption for Chinese-made car computer ‘brain’

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Tesla Inc has asked the Trump administration make exemption for the Chinese-made car computer “brain” of its new Model 3 sedan from 25 percent tariffs imposed in August, stated they threaten the electric automaker’s bottom line.

“Increased tariffs on this particular part cause economic harm to Tesla, through the rise of costs and impact to profitability,” the company stated in a previously unreported request for tariff relief from the government.

Led by Elon Musk, Tesla is among a host of companies, together with No. 1 U.S. automaker General Motors, to warn of increasing costs related to the tariff war between the world’s two largest economies.

The Chinese-made computer, utilized by Tesla in the vehicle assembled in Fremont, California, was among $16 billion in imports that were hit with 25 percent tariffs by the United States Trade Representative’s Office in last year.

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

Tesla refused to comment on the tariff matter on Friday. But it has been frequently cutting costs as it works to meet production goals for the Model 3, that has become a top-selling luxury sedan on the U.S. market next to the larger Model S.

Other automakers have sought same exemptions but have not yet received any answer for their request.

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