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Tesla Gets Tariff Exemption For Japanese Aluminum

tesla jun25 lt

Electric car maker Tesla has been granted a tariff waiver by the U.S. Commerce Department for the import of aluminum from Japan to make Tesla battery cells at its Gigafactory 1 in Nevada, according to a Reuters report. Tesla had made a request for the waiver in May and it was accepted only for a period of one year.

Tesla has secured a 10 percent tariff exemption for aluminum as it plans to increase battery cell production. It had requested for the exemption for the import of 10 million kg of aluminum produced by Nippon Light Metal Co. in Japan.

According to a filing, Tesla says it was importing 6.4 million kg of the specific alloy per year, but now plans to increase it to 10 million kg this year. Tesla's battery packs require a significant amount of aluminum to produce.

The specific alloy is described by Tesla as "Alloyed Aluminum Coil, Not Backed, Slit But Still Coiled, Hot Rolled then Cold Rolled, 73MM in width, 1MM Thick, Slight Etched on splice end."

Tesla has recently been denied 25 percent tariff exemptions for the import of its Model 3's components such as the autopilot computer, vehicle control computer and touchscreen, from China. The decision came amid the recent escalating trade war between the world's two-biggest economies.

The automobile manufacturing industry has been particularly hit by the government imposing strict tariffs on imported goods from a whole host of countries, primarily China. Most of them use major components and raw materials from outside the US.

Tesla earlier had noted that costs for producing vehicles in the U.S. were hurt by import duties on certain Chinese-made components.

Effective March 23, 2018, President Trump applied 25 percent and 10 percent tariffs, on certain steel and aluminum imports respectively.

The aim was to block China's efforts to develop high-technology industries as part of its 'Made in China 2025' program. However, the U.S. government allowed companies to petition for exemptions.

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