(Yicai) Nov. 26 -- A supplier’s country or geographical origin does not constitute an exclusion criterion, Tesla’s vice president said after rumors that the US electric vehicle maker is seeking to decouple from China.

The supplier evaluation of Tesla’s global factories remains consistent and based entirely on quality, costs, technological maturity, and long-term supply stability, Tao Lin said on Weibo today. The high cost-effectiveness of Tesla in the Chinese market stems from the “made in China” approach of the Shanghai factory, she added.

Tesla works with over 400 supply chain partners in China to pursue the best quality and efficiency, and has incorporated more than 60 of them into its global procurement system, Tao noted.

Tesla is requiring suppliers to exclude China-made components in vehicles produced in the United States and aims to shift to non-China components entirely within one to two years, The Wall Street Journal reported on Nov. 15, citing people familiar with the matter.

Earlier in April, media reports indicated that some Chinese-manufactured parts were being replaced by components from other regions, primarily Mexico, Canada, and other North America, as well as parts of Europe and Asia. Tesla has been reportedly encouraging Chinese suppliers to relocate their production lines to these regions.

US automakers are adopting a so-called ‘de-sinicization strategy’ for two reasons, according to Chen Bing, special commentator for Shenzhen Television. The first is to mitigate risks, fearing that President Donald Trump may adopt more aggressive trade policies after the mid-term elections next year, pushing for a return of “US manufacturing.”

The second is that the de-sinicization trend among US and European companies is gaining momentum, driven more by sentiment than rational judgment. Companies see the truce in the China-US trade war as a buffer period for supply chain adjustments.

A recent report by Roland Berger claimed that the global automotive industry is beginning to decouple, with China emerging as the leader, Europe taking a back seat, and the US becoming increasingly isolated. For the US, strong protectionist policies mean that growth will largely rely on domestic original equipment manufacturers.

Decoupling does not simply mean that each region acts independently, the report noted. China is leading battery development with direct access to critical raw materials and intensive technical know-how.

Outside China, Europe, the US, Japan, and South Korea remain closely interconnected and generally aligned with international standards, such as regulations from the International Organization for Standardization, the Automotive Open System Architecture, and the United Nations Economic Commission for Europe.

Last year, China’s auto parts exports to the US totaled USD13 billion to USD20 billion, accounting for about 16 percent of China’s total auto parts exports. The exported products include body parts, aluminum alloy wheels, powertrains, chassis parts, tires, glasses, electrical and electronic components, and automotive chips.

Editor: Futura Costaglione