Tesla wins tariff exclusion for Japanese aluminum used in its batteries

The U.S. government has agreed to Tesla’s request to waive 10 percent tariffs on imported aluminum from Japan used in the manufacture of battery cells at Gigafactory 1

Tesla’s application for an exemption on 10 million kg of aluminum produced in Japan has been approved.

What Happened?

The U.S. Department of Commerce agreed to waive the 10 percent tariffs, for one year, stating that the aluminum “is not produced in the United States in a sufficient and reasonably available amount or of satisfactory quality”.

The automaker had made the request in documents posted in April and said the aluminum is produced by a Japanese company called Nippon Light Metal Co Ltd.

Why It Matters

This 10 percent tariff would have increased the cost to manufacture its battery cells at Gigafactory 1.

The battery cells are assembled into packs which are the energy source for the Tesla Model 3 vehicle as well as energy storage products.

“Tesla is the only U.S manufacturer of these battery types and planned the production of these batteries will increase exponentially over the next few years,” the company’s request said.

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