Tesla chooses suppliers based on quality, not country, says executive

Tesla's procurement decisions are based on quality, total cost, technical maturity and the continuity of long-term supply, Grace Tao, a Tesla vice president in China, wrote on Weibo

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A senior Tesla Inc executive said the electric vehicle maker evaluates suppliers based on technical merit rather than geography, highlighting the company’s close partnerships with Chinese manufacturers at a time when heightened geopolitical tensions are complicating global trade. 

“A supplier’s country of origin does not constitute an exclusionary standard,” Grace Tao, a Tesla vice president in China, wrote on Weibo Wednesday. The company applies “the same strict, objective standards” for supplier selection across its production bases in the US, China, and Europe, she wrote on the social media platform. 

 

Tesla’s procurement decisions are based on quality, total cost, technical maturity and the continuity of long-term supply, she wrote.

 

Tao’s comments coincide with increased scrutiny over carmakers’ supply chains after escalating trade tensions between Washington and Beijing rippled through the global auto industry. The Wall Street Journal reported earlier this month that Tesla planned to stop using Chinese-made components in cars assembled in the US, while Reuters has said General Motors Co. is undertaking similar measures.

 

It’s unclear how easily American manufacturers can move away from China given the latter’s dominance across the complex network that makes up the supply chain. Tesla’s Chinese operations are significant, with its Shanghai factory not only its largest production hub but also serving as a primary export center for markets in Asia and Europe. 

 

Tao also wrote that Tesla currently works with more than 400 supply chain partners in China. Of those, the automaker has integrated more than 60 Chinese vendors into its global procurement system, a move she said helps these companies enter the “world stage.”