Electric carmaker Tesla will reportedly increase prices in China this week in anticipation of rising tariffs — but one automobile expert says the higher costs will not likely last.
That's because the company will localize its production to avoid the impact of additional duties, brought on by the escalating trade dispute between the U.S. and China, said Bill Russo, founder and CEO of private equity firm Automobility Limited.
The U.S. and China have been locked in a trade battle for more than a year, with both sides slapping additional tariffs on each other's goods. U.S. automobiles and auto parts will be subjected to a 25% tariff from Dec. 15 this year,"The challenge is: You need to bring the products in and make money. So I think, yes, a step up in price is probably likely," said Russo.
Sourcing and manufacturing within the country will be "essential" for automotive companies because of stiff competition, he said.
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