Biden's new tariffs will raise the tax on imported Chinese EV batteries from 7.5% to 25%. This will impact Tesla's production costs for the Model 3 RWD using battery cells from Chinese supplier CATL.
Manufacturers are hesitant to raise prices due to sluggish EV demand, seeking a balance between supply and demand as higher costs are unlikely to be passed on to consumers.
Increased tariffs on Chinese-made EVs, although largely symbolic as there are few in the U.S. market, may serve political goals of supporting manufacturing hubs like Michigan and Ohio.
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